All India Gaming Federation v. State of Karnataka & Ors
(2022) 1 KCCR 513
In the High Court of Karnataka
W.P. 18703/2021
Before Chief Justice Ritu Raj Awasthi and Justice Krishna S. Dixit
Decided on February 14, 2022

Relevancy of the case: Constitutional validity of the Karnataka Police (Amendment) Act, 2021 that made playing and facilitating online wagering/betting games illegal 

Statutes and Provisions Involved

• The Karnataka Police (Amendment) Act, 2021 (Section 2, 3, 6, 8, 9, 78, 79, 80, 87, 114, 128A, 176) 
• The Constitution of India, 1950 (Article 19, 301)

Relevant Facts of the Case

• The All India Gaming Federation challenged the Karnataka Police (Amendment) Act, 2021, as it violated fundamental rights. It made both playing and facilitating online wagering and betting games illegal.
• It is alleged that this amendment exceeded the states’ authority to enact such legislation.
• Before the amendment, the Act had no jurisdiction over such online games. 

Prominent Arguments by the Advocates

• The petitioner’s counsel argued that the Chamarbaugwala cases have lent constitutional significance to ‘betting and gambling’, so the amendment was not within the state’s legislative power. Entry 34 means only betting on gambling activities, thus excluding online games involving skill. The act failed to distinguish between a game of chance and a game of skill. The Amendment imposes far harsher penalties than necessary because it made the offence cognisable and non-bailable.
• The respondent’s counsel opposed the petitions as the Amendment made by the State derived legislative powers under Article 246 read with Entries 1, 2, 6 & 34 of the State List. The respondent’s counsel argued that the petitioners lack cause of action as these games, be they of chance or skill, can be played without attracting penal provisions when played without the element of gambling.

Opinion of the Bench

• Entry 34 of the State List gives the power to the State to legislate gambling, but there is no express or implied prohibition of gambling in the Constitution. According to the predominance test, a game that involves a substantial amount of skill is not gambling.
• Playing games online does not turn games of skill into games of chance. Regulation of online games comes under Entry 6 of the State list when interpreted broadly. Online games are a form of expression and a mode of business.
• Online gaming activities that predominantly involve skill, judgment or knowledge do not fall within the ambit of Entry 34 of the State List, irrespective of the stake placed. They gain business character and have protection under Article 19(1)(g).
  

Final Decision

• The court struck down Sections 2, 3, 6, 8 & 9 of the Karnataka Police (Amendment) Act, 2021 on account of being unconstitutional.
• The court issued a writ of mandamus to restrain the respondent from interfering in the online gaming business.

Ojasvi Gupta, an undergraduate student at the Faculty of Law, Banaras Hindu University, prepared this case summary during her internship with The Cyber Blog India in May/June 2022.