Karnataka to bring in new law to tackle online gambling

MANDYA/BENGALURU: The govt is working on new legislation to regulate online betting and gambling, marking a fresh attempt to ban games of chance while allowing skill-based gaming under a controlled framework. The proposed move mirrors the Chhattisgarh model, which seeks to balance consumer safety with growth of the online gaming industry.

Home minister G Parameshwara Wednesday confirmed that plans were afoot to introduce a new legislation. "IT minister (Priyank Kharge) and I had a meeting on regulating online betting and gambling yesterday (Tuesday)," Parameshwara said. "Representatives from the industry were present. They have agreed to the introduction of a licence system and a regulation as per law."

Parameshwara said that a committee comprising senior officials and industry representatives was constituted to prepare the draft bill. "It has been given a month's time to submit a draft of the proposed bill. Once the draft is ready, we will introduce a new law," he said.

Highlighting the broader intent behind the move, Priyank had earlier said, "The intent of the new law is to curb online gambling, betting, and games of chance, and protect consumers from fraud while supporting innovation and the sustainable growth of the skill-based gaming industry."

Priyank Wednesday revealed that the online skill-based gaming industry in India is a "sunrise sector worth $4 billion" and one which contributes Rs 12,000 crore in taxes and accounts for over 1.5 lakh jobs. Karnataka alone accounts for 25% of the market and contributes Rs 1,350 crore annually in taxes, making it a key hub. But he raised red flags about the rise of illegal gambling and betting platforms operating in the shadows.

"Alongside the legitimate sector, there is a parallel underground market that is expanding rapidly, posing risks such as predatory money collection practices, dubious shell companies, financial fraud, data breaches, and cybercrimes," Priyank said.

He also engaged with industry associations including E-Gaming Federation, All India Gaming Federation and the Federation of Indian Fantasy Sports. "These federations together have proposed a ‘Code of ethics' for member platforms," Priyank said. "This code, adopted by member companies, aims to promote user safety and responsible gaming practices across India's skill-based real-money gaming sector, safeguarding the interests of over 50 crore Indian gamers."

In 2021, the previous BJP govt had amended Karnataka Police Act to ban online games, but the law was struck down by the high court. At the time, then CM Basavaraj Bommai had said, "There is a lobby behind this. We did our groundwork and made laws." He had also noted the ease with which offenders secured bail, saying, "If the police conduct raids and arrest culprits, they make bail by the evening."