Will affect livelihoods, investments: Head Digital Works challenges online money gaming ban in Karnataka High Court

Head Digital Works Private Limited, an online gaming company, has approached the Karnataka High Court challenging the recently enacted Promotion and Regulation of Online Gaming Act, 2025, which bans online games played for money.

The company has contended that by prohibiting online Rummy and Poker, the law violates constitutional protections for legitimate business, undermines prior judicial rulings recognising skill games and endangers employment and investment across the gaming industry.

The Bill was cleared by the Union Cabinet on August 19 and tabled in the Lok Sabha the following day. It was passed by voice vote in the Lok Sabha within minutes of introduction, cleared by the Rajya Sabha on August 21 and received Presidential assent on August 22.

The Act criminalises offering or playing online money games, irrespective of whether they are games of skill or chance. Offences are categorised as cognisable and non-bailable.

Head Digital Works has argued that this sudden shift came without prior public consultation or parliamentary committee scrutiny, despite the Union government having previously endorsed a regulatory framework under the Information Technology Rules, 2021

The plea challenges Sections 2(1)(g), 5, 6, 7 and 9 of the 2025 Act. It is contended that these provisions impose a complete prohibition on online games of skill played for stakes, classifying them alongside gambling.

As per the petitioner, Parliament lacked legislative competence to enact such a prohibition and the law infringes fundamental rights guaranteed under Articles 14, 19(1)(a), 19(1)(g), 21 and 301 of the Constitution.

Head Digital Works has pointed to settled jurisprudence of the Supreme Court and various High Courts distinguishing skill games such as Rummy and Poker from gambling. By disregarding these precedents, the 2025 Act has effectively criminalised a lawful activity that has been consistently recognised as a protected trade under Article 19(1)(g), it has been contended.

To buttress its case, the company has highlighted the consequences of the prohibition on both the company and the wider industry.

Head Digital Works, which operates the A23 platform, has stated that it employs over 600 staff members across offices in Hyderabad, Bengaluru and other cities. It has claimed that the wider sector provides livelihood to nearly two lakh employees in technology, design, animation and customer support.

The plea further notes that the company has paid more than ₹1,643 crore in goods and services tax (GST) since the introduction of the tax regime, including ₹687 crore in 2024–25 alone. The company also claims to have contributed about ₹12 crore towards corporate social responsibility initiatives.

According to the petition, the abrupt prohibition risks investments of approximately ₹23,440 crore in the sector, including significant foreign investment.

In 2022, the Karnataka High Court had invalidated amendments to the Karnataka Police Act that sought to ban online skill games. The Madras High Court struck down Tamil Nadu’s attempts to prohibit rummy and poker in Junglee Games v. State of Tamil Nadu and All India Gaming Federation v. State of Tamil Nadu. The Kerala High Court similarly set aside a notification banning online rummy for stakes.

All three states have appealed these decisions to the Supreme Court, where the matters have been heard and are reserved for judgment.

According to the plea by Head Digital Works, the Centre’s 2025 legislation ignores these binding pronouncements and contradicts its own earlier position in court proceedings that regulation of skill games falls within State competence

It thus urges the Court to affirm that Rummy and Poker remain legitimate business activities protected under Article 19(1)(g).