On September 21, the Karnataka legislature passed a law amending the 1963 Karnataka Police Act, making all forms of gambling, including online, a knowable and non-bondable offense. . The Karnataka Police (Amendment) Act 2021 was notified and entered into force on October 5
It was adopted in Karnataka despite similar laws introduced in Tamil Nadu, with Kerala and Telangana facing legal challenges to expand the scope of gambling beyond what has been defined by law. On August 3, the Madras High Court struck down the Tamil Nadu Gambling and Police Act 2021 (Amendment) as ultra vires. And on September 27, the Kerala High Court, relying on the Madras HC Order, overturned an amendment to Kerala Gaming
Law of 1960 which prohibited rummy online.
Since the new law came into effect, several online gaming companies have geo-locked their apps and sites in Karnataka to avoid attracting police action if customers access the sites. An FIR was registered on October 7 under the amended law against the creators of the online fantasy sports platform Dream 11 for running a gambling house as defined in the
What are the legal questions raised by these amended laws?
One of the main reasons that the new gambling laws in Karnataka, Kerala and Tamil Nadu have been challenged is that games of skill have been associated with games of chance in the definition of gambling, though gambling has been associated with gambling. address are played for prizes or bets.
Gaming companies have argued – with success in Tamil Nadu and Kerala – that according to the law enacted by the Supreme Court in 1957 (Chamarbaugwala cases) – competitive skill games are protected business activities under Article 19 (1) (g) of the Constitution.
Rummy and horse racing have been classified by the courts as games of skill that fall outside the scope of gambling laws, on the basis that skill or chance predominates. in the result. It has been argued that states do not have “legislative competence” to prohibit games of skill and that only games of chance can be regulated for gambling and betting.
Why has Karnataka changed the law?
Among the reasons given by the government is an order from the Dhanwad bench of the High Court of Karnataka (Vageppa Gurulinga Jangaligi vs Kagwad police, December 2019) that the police cannot search gambling houses without a formal written order to ‘a magistrate, since gambling is a non-offense that can be the subject of knowledge and a deposit.
The order of Judge PGM Patil stated that in unrecognizable offenses, the “SHO of the police station has no authority of law unless the judicial magistrate authorizes the police officer to investigate persons not. recognizable “.
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Recent public interest litigation to ban online gambling and betting was also behind the changes.
According to the Statement of Objects and Reasons, the new law is necessary to make gambling a knowable offense and not subject to a deposit (gambling on public roads remains knowable and liable to a deposit). The new law was also introduced to “include the use of cyberspace, including computer resources or any other communication device as defined in the Information Technology Act 2000 in the gaming process in order to reduce the threat of gaming via Internet, mobile application “.
What forms of gambling does the new law cover?
The amended law covers all forms of betting or betting “in connection with any game of chance” with the exception of horse races and lotteries. It also places bets on the skills of others in the category of gambling. It only provides for an exception to any pure game of skill and not to “bets by persons participating in such a game of skill”.
According to the amended law, “all forms of betting or betting, including in the form of tokens valued in terms of money paid before or after their issue, or of electronic means and virtual currency, of electronic transfer of funds in relation to with any game of luck ”, will be considered a game of chance. The new law treats gambling websites the same as physical gambling dens.
The new law increases the maximum penalty for owners of gaming centers from one to three years imprisonment and fines from Rs 1,000 to Rs 1 lakh. The proposed minimum sentence is six months instead of one month currently and the fine is Rs 10,000 instead of Rs 500.
For aiding or abetting gambling, the sentence was increased to six months and a fine of 10,000 rupees. A first offense of running a gaming house will result in a minimum penalty of 6 months and a fine of Rs 10,000, a second offense 1 year and Rs 15,000, and a third 18 months and Rs 20,000.
Will these changes stand the test of the law?
As mentioned, a similar law in Tamil Nadu was overturned by the Madras High Court as ultra vires after being challenged by online gaming companies.
The court ruled on August 3: “It is true that, in general, games and sports activities in physical form cannot be assimilated to games conducted in virtual mode or in cyberspace. However, when it comes to card games or board games like chess or Scrabble, there is no distinction between the skill involved in the physical form of the activity or in the virtual form. .
The HC has stated that rummy and poker are games of skill. “Poker may not have been recognized in any previous judgment in this country as a game of skill, but the evidence in this regard is clear from the US case which even convinced the Law Commission to accept poker. like a game of skill in its 276th report, ”he observed.
What is the status of the new law?
The All India Gaming Federation and several online gaming companies have contacted Karnataka HC to challenge the changes and extension of the law to cover games of skill such as rummy. The HC did not order a suspension, but the government told the court that it would not take any rushed action against the gaming companies under the new law while the cases filed by the Gaming Federation and the companies were pending. games.