As the Karnataka Assembly passed amendments to Karnataka Police Act, severely affecting the online gaming industry, the industry is hopeful of an explanation on the bill concerning the prohibition of ‘games of skill’.

According to the bill that was tabled and passed in the Karnataka Assembly, the State is checking out a prohibition on all arrangements of online gaming that include an entry fee or registration charge.

IndiaTech, an industry body representing new companies like Dream11, MPL, Zupee among others, has sent a letter to Karnataka’s CM Basavaraj Bommai looking for an explanation that the bill revisions won’t be relevant to online skill-based gaming and sports.

Rameesh Kailasam, CEO, IndiaTech.org told the news office that “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. Various court orders have grounded the legality around games of skills, even where money is involved and accordingly ought not to be understood as gambling or wagering or betting,” Rameesh Kailasam, CEO, IndiaTech.org told BusinessLine.

He added that the Govt of Karnataka ought to properly issue guidelines, in discussion with the industry to guarantee that its goal is lined up with the industry over cinching down on betting and gambling.

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

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

Effect on players
PK Misra, President Players Association – AIGF (Ex-IAS) said that “The move by the State government in passing the Karnataka Police (Amendment) Compliance Act, 2021 comes as a genuine mishap to the enormous expert player’s community that dwells in the State. These players, who represent India in domestic and worldwide level competitions like the 2018 Asian Games and World Series of Poker look to this internationally acknowledged sector as a way to their livelihood, which has as of now saw an extreme effect because of the Covid-19 pandemic”.

The bill is relied upon to affect all gaming formats including casual games, strategy games, and even esports. “While the bill says it is to boycott online betting, what has happened is that it has prohibited everything, including skill games. Along these lines, anyone who needs to pay an entry fee, and plays a game of speed chess, fantasy cricket on MPL would not be permitted to do as such,” said Landers.

Effect on startups and jobs
As per 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 procured.

“The decision in Karnataka could negatively affect development and investment in the business. 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 worldwide 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 additionally 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.

He added that “In any case, by including games of skill for the ambit of the bill, it has conflicted with set up law as well as compromises the flourishing Indian gaming startup sector”.

Credits: LatestLaws