Head Digital Works, the owner of online rummy platform A23, has moved the Karnataka High Court against the Promotion and Regulation of Online Gaming Act. The matter is set to be heard before the court on August 30.
The petition prays for the quashing of the law as unconstitutional and ultra vires (exceeding its ordinary legal authority). In the interim, it calls for the enforcement of the law to be stayed.
The Act had obtained presidential assent on August 22. The Act has effectively imposed a complete ban on online gaming services that involve real money. Alongside a ban on the actual provision of such services, it also bars the provision of advertising and endorsement for these, as well as involvement in the provision of financial services and transactions with online gaming platforms where real money is involved.
The law also has stringent provisions in case it is violated; engaging in offering an online gaming service with money can attract a prison sentence of up to three years along with a fine of Rs 1 crore, with a similar penalty applying for those who violate the stipulations against supporting these platforms via financial transactions. Advertising these platforms can attract a fine of Rs 50 lakh and/or a sentence of up to two years.
The law does not discriminate between “games of skill” and “games of chance” when it comes to the bar on gaming services with real money.
In 2022, a division bench of the Karnataka High Court, consisting of Chief Justice Ritu Raj Awasthi and Justice Krishna Dixit, had ruled that portions of the Karnataka Police (Amendment) Act, 2021, were unconstitutional as games of skill were also affected. It was observed at the time that they would fall into the ambit of games of skill and would therefore be under the trades envisioned under Article 19 (1)(g) of the Constitution.