Karnataka Plans New Law to Ban Gambling, Permit Skill-Based Games, Says Minister

Prepend to the content

Karnataka is set to introduce a legal framework to regulate the online gaming industry by banning gambling while allowing skill-based games, following a model similar to Chhattisgarh. The move aims to support innovation and sustain the industry while ensuring consumer protection against fraudulent gaming operations.

As reported by Money Control, speaking on the sidelines of an event in Bengaluru, Karnataka IT-BT Minister Priyank Kharge said, “We are considering regulatory models that create a better environment for the gaming industry, including evaluating the Chattisgarh model.”

Kharge emphasized that the government does not intend to hinder the gaming industry, acknowledging that industry stakeholders advocate for regulation. “We are working to ensure that, with their help, we can create a framework that supports innovation, sustains the industry, and builds skills while also protecting people from losing money to fraudulent gaming sites or networks operating outside the system,” he added.

Chattisgarh Model as a Reference

Chattisgarh’s online gambling law, implemented in March 2023, applies to ‘games of chance,’ where the outcome is determined predominantly by luck. In contrast, skill-based games—where knowledge, expertise, and training influence the result—are exempt from the ban. Karnataka is now considering a similar approach.

The IT department is engaging in discussions with the Law and Home departments before drafting a bill. “Gaming and innovation fall under IT, so I must take the lead in educating them about its nuances. There is a fine line between a game of chance and a game of skill, and we must be careful to avoid harming the industry,” Kharge noted.

Karnataka’s History with Online Gaming Laws

In 2021, Karnataka attempted to ban all forms of online gambling through the Karnataka Police (Amendment) Bill, which removed the distinction between skill-based and chance-based games. However, in February 2022, the Karnataka High Court struck down key provisions of the bill as unconstitutional. The state later moved the Supreme Court challenging the ruling, and the case is still pending.

Need for Central Regulation

Karnataka’s move to draft a state-specific law comes amid the absence of a uniform central regulatory framework for online gaming. In April 2023, the Ministry of Electronics and Information Technology (MeitY) introduced gaming-related amendments to the IT Act, allowing self-regulatory organizations (SROs) to determine which real-money games could operate legally. However, the SRO plan was reportedly dropped later.

Industry experts have called for a central regulatory framework to address inconsistencies across states, as differing regulations create legal challenges for gaming firms. Tamil Nadu, for instance, recently implemented stricter rules for real-money gaming, imposing time restrictions and mandatory KYC norms. These rules are now facing legal challenges from companies such as Games24x7, Junglee Games, and Head Digital Works (A23).

A centralized approach is also needed to address illegal offshore gaming operators, as state-specific laws cannot be enforced against foreign entities.

Indian Gaming Industry Growth

The Indian gaming sector reported revenues of $3.8 billion in FY24, a 22.6% increase from $3.1 billion in FY23, according to a report by gaming venture fund Lumikai. Of this, $2.4 billion came from the real-money gaming segment. The industry is projected to reach $9.2 billion in revenue by FY29, with a compound annual growth rate (CAGR) of 20% over the next five years.

With Karnataka taking steps to regulate the sector, the industry will be observing how the new legal framework balances innovation, consumer protection, and responsible gaming policies.

The post Karnataka Plans New Law to Ban Gambling, Permit Skill-Based Games, Says Minister appeared first on G2G News.