As the Karnataka Assembly passed amendments to Karnataka Police Act, seriously affecting the online gaming industry, the industry is confident of an explanation on the bill in regards to the rejection of ‘games of skill’.

According to the bill that was tabled and passed in the Karnataka Assembly, the State is taking a gander at a restriction on all configurations of online gaming that include an entry fee or registration charge.

IndiaTech, an industry body representing start-ups like Dream11, MPL, Zupee among others, has sent a letter to Karnataka’s chief minister Basavaraj Bommai looking for an explanation that the bill amendments won’t be applicable to online skill-based gaming and sports.

“We have requested the Chief Minister and Home Minister to promptly give essential explanations to guarantee the right signals go to the startup and investment community. Different court orders have grounded the lawfulness around the game of skills, even where money is involved and in this way ought not to be interpreted as gambling or wagering or betting,” Rameesh Kailasam, CEO, IndiaTech.org told BusinessLine.

He added that the Karnataka government ought to suitably give rules, in meeting with the industry to guarantee that its goal is lined up with the industry over clipping down on betting and gambling.

All India Gaming Federation CEO Roland Landers said, “We first need to check whether there’s an explanation on the bill. We will sit tight for the last notice, to check whether there are a few changes in tonality or language of the bill. In light of this, we will strategize in transit forward.”

Following different State guidelines, online games working in formats like online fantasy sports (OFS) and online rummy have needed to prove skill prevalence in their respective formats. States, for example, Telangana, Andhra Pradesh, Assam, Odisha, Nagaland, and Sikkim have put a restriction on online rummy. Notwithstanding, a comparative boycott didn’t pass in Tamil Nadu where the high court has held that online rummy includes a high predominance of skills and accordingly can’t be considered as gambling, in any event, when played with stakes.

Effect on players
“The move by the State government in passing the Karnataka Police (Amendment) Compliance Act, 2021 comes as a real misfortune to the large expert player’s community that dwells in the State. These players, who represent India in domestic and worldwide level competitions, for example, the 2018 Asian Games and World Series of Poker look to this universally accepted sector as a way to their work, which has effectively seen an extreme effect because of the Covid-19 pandemic,” said PK Misra, President Players Association – AIGF (Ex-IAS).

The bill is relied upon to affect all gaming formats including casual games, technique games, and even esports. “While the bill says it is to actually ban online gambling, what as a result has happened is that it has restricted everything, including skill games. In this way, anyone who needs to pay an entry fee, and play a game of speed chess, fantasy cricket on MPL would really not be permitted to do as such,” said Landers.

Effect on startups and occupations
As indicated by EY-All India Gaming Federation (AIGF) report, ‘Online gaming in India-The GST conundrum’, the Indian online gaming sector contacted about $1 billion in 2020 and is relied upon to reach $2 billion by 2023 as far as rake fees earned.

“The decision in Karnataka could negatively affect development and investment in the industry. As of now, Karnataka is home to more than 91 gaming organizations and developers, which employ around 4,000 individuals. The Bill, in its present structure, will seriously affect these organizations, as income and employment cut back, and smother the development of this sector.” said Kazim Rizvi, Founder of a public policy think tank, The Dialog.

Recently, IAMAI (Internet and Mobile Association of India) has noticed that global investors have invested about ₹3,000 crores in gaming and animation startups in Karnataka. The industry body added that such legislative activities may “make a haze of disarray and make regulatory uncertainty, which may unexpectedly bring about investors recalibrating their investments and many existing organizations might think about moving base from the State.”

Secretary-General of the Confederation of All India Traders (CAIT), Praveen Khandelwal has likewise as of late kept in touch with Basavaraj Bommai, the Chief Minister of Karnataka expressing that game of chance is pure gambling and ought to be legitimately prohibited. “Nonetheless, by including games of skill for the ambit of the bill, it has conflicted with the established jurisprudence as well as compromises the flourishing Indian gaming startup sector,” he added.

Credits: Business Line