Karnataka Cabinet Approves Bill To Ban Online Gambling

Karnataka Cabinet Approves Bill To Ban Online Gambling

The Karnataka government has been under a lot of pressure from the general public and religious organizations to ban online gambling in all its forms. The online gambling market in India, including Karnataka, has grown exponentially in the last couple of years, especially during COVID-19.

iGaming and Betting Thrives

Bengaluru, which is the largest city in Karnataka, is considered the silicon valley of India as it is one of the most cosmopolitan cities in the country with a flourishing I.T industry. The younger generation of tech-savvy professionals was forced to work from home during an extended lockdown period in the state.

Millions of young Indians in Karnataka started playing different forms of online casino games as a form of entertainment and also to make money. They found no shortage of online casino and sports betting sites as loads of offshore betting sites have taken advantage of the grey gambling laws in Karnataka and offered a range of gaming and betting services.

Offshore gaming sites have served up various online casino games, including slots, online poker, jackpot games, live dealer casino games, rummy, teen-Patti, and online bingo. Multiple offshore sports betting sites have also allowed Indian players to register accounts and place their bets in Indian rupees.

Since gambling is banned in all forms in retail form, players in Karnataka were only too happy to place their bets online and place their favorite online casino games.

Multiple Complaints Against iGaming

The sudden growth spike in online casino and sports betting during COVID-19 brought in a flood of new player registrations and revenue for offshore gaming and betting operators. However, it also brought an increase in the number of complaints as young Indians were getting themselves into a lot of gambling debt and falling into depression due to their gambling losses.

This wasn’t just the case with Karnataka, as multiple states across India reported a similar trend. Multiple public interest litigation (PIL) cases were filed in Karnataka against these online betting and gambling sites. Anti-gambling opponents claimed that the ruling government in Karnataka was not doing enough to protect its residents.

They were right as online gambling is banned in Karnataka, and there is no gaming regulator to oversee the offshore gambling industry. As a result, the Karnataka government had no option but to take the matter seriously and address the issue directly.

Draft Bill Looks To Ban iGaming

The Karnataka Police (Amendment) Bill was put together to ban all forms of online gambling in the state, and the same was approved by the Karnataka Cabinet of ministers. J C Madhuswamy, Law and Parliamentary Affairs Minister for Karnataka, said they pushed ahead with an amendment for the Karnataka Police Bill based on the directions of the High Court.

The amendment uses a broad definition to cover online games. All games of chance and wagering, whether it be for real money or play money, whether it be for money paid before the issuance of virtual currency or after the issuance of virtual currency, will be banned going forward. The amendment does not cover betting on horse racing or lottery games.

Now that the Karnataka Cabinet has approved the bill, the second step is for it to be reviewed in the Legislative Assembly in the coming weeks. If the Assembly approves the amendment, then offshore gaming operators will have to stop offering online betting and casino games.

The draft bill looks to impose stiff financial penalties on offshore gaming operators who illegally offer online betting and gaming services in Karnataka. Violators could face a fine of up to 1 lakh rupees and serve jail time for up to three years.

Will Karnataka Be Able To Implement Ban?

Neighbouring Tamil Nadu also went through a similar situation in 2020 when the state government was forced to take action on offshore gaming operators after several complaints and PILs were filed. Tamil Nadu also decided to ban all forms of online gambling and sports betting, bypassing the Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021.

Several online gambling operators filed appeals in the Madras High Court for being unfairly treated. In the end, the Madras High Court voided the Act because it violated Constitution’s Article 19(1)(g), which gives individuals the fundamental right to practice whatever business, trade or occupation they want.

If Karnataka should approve the Karnataka Police (Amendment) Bill, the affected operators are likely to appeal the law and file petitions in the Karnataka High Court against the new law. Given that the Madras High Court struck down the bill, a similar decision could be made in Karnataka.

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