Betting and Gambling
In recent years, there has been much dispute about whether internet gambling is a game of skill or a game of chance. A number of concerned governments, including Kerala, Tamil Nadu, and Karnataka, have passed laws prohibiting Rummy and other games based completely on chance.
It goes without saying that laws will be challenged, and this is exactly what happened. Honourable High Courts determined such rules to be in violation of the Indian Constitution, as well as parent statutes and provisions in some situations, depending on which states issued the rules.
The High Court of Karnataka recently issued a decision that took into account earlier Supreme Court of India decisions as well as the Indian Constitution.
2022, Case No: WP 18703/2021, All India Gaming Federation vs. State of Karnataka
Background Information about the Case
The state change came after a public interest lawsuit was filed in the Karnataka High Court, seeking to outlaw internet gambling. It abolished the difference between skill and chance games, putting skill-based gaming start-ups within its jurisdiction.
The amending legislation took effect on October 5, 2021, and it covers all types of wagering or betting, including tokens valued in terms of money paid before or after their issue. It has outlawed the use of electronic methods and virtual money, as well as electronic financial transfers in conjunction with any type of gambling game.
Facts of the Case: The Karnataka Government has enacted the Karnataka Police (Amendment) Act, 2021, which prohibits all forms of wagering, betting, and gambling of any kind in the state.
The state government argued in court that the amendments do not prohibit people from playing online "games of chance" or "games of skill," but they do prohibit people from betting money "on the outcome of an uncertain event" and online platforms from luring gullible people with the promise of unattainable prizes. Following this, various gaming federations came forward and filed a writ petition against the Karnataka State Government.
1.The Karnataka Police (Amendment) Act, 2021 does not fit into Entry 34, List II, or Schedule VII of the Indian Constitution, resulting in a lack of legislative competence.
2. Violation of Article 21 because video games and sports fall under the umbrella of the "right to life and liberty," which has been stretching precedent after precedent, as well as a violation of the doctrine of privacy.
3.Violation of Article 19(1)(a fundamental )'s right to freedom of speech and expression, because playing games and sports of skill is a form of speech and expression, and criminalising it, aside from being an unreasonable restriction, is incompetent under Article 19(1)(a) (2).
4.Incompetent & unreasonable restriction of the fundamental right to profession/business guaranteed under Article 19(1)(g) read with Article 301.
Reasons for Judgment
If they principally involve skill, judgement, or knowledge, online gaming activities performed for a stake or not fall under the purview of Entry 34 of the State List, i.e., 'Betting and gambling.' They participate in the nature of commercial operations and, as a result, are protected under Article 19(1). (g). Under Article 19, skill games performed online or offline with or without stakes are subject to reasonable regulations (6). The Amendment Act establishes a broad restriction on playing skill games.
The nature and appropriateness of the limits, as well as the versions and counter-versions, must be considered in light of the Apex Court's standards.
On a prima facie case of a breach of Fundamental Rights, such as those granted under Article 19(1), the onus would shift to the State to establish that the law in issue falls within the legal limitations of the most relevant out of clauses (2) to (3). (6).