Karnataka’s online gambling ban will adversely affect start-ups, states CAIT

The Confederation of All India Traders has released a statement expressing how The Karnataka Police (Amendment) Bill, 2021 will hurt various Indian start-ups operating in the sector. The coalition, which acts as a representative of more than 8 crore traders along with 40,000-plus trade associations, addressed a letter to the state Chief Minister on Tuesday outlining their concerns.

The bill was scheduled to be tabled in the State Legislative Assembly later that day and has since been passed, citing the inadequacy of existing laws to curb online gambling. The purview of the law includes online betting, wagering and gambling of all forms, except horse racing and lotteries, in the list of punishable offences.

However, industry stakeholders believe doing so will only encourage illegal applications which aim to prey on innocent victims under the guise of offshore gambling and betting. There have been several such cases in recent years where citizens have lost large sums of money to companies operating in the grey market.

“Unfortunately, the Karnataka Bill does not distinguish between a game of skill and a game of chance. Game of chance is pure gambling, and should be rightfully banned. However, by including games of skill in the ambit of the Bill, the proposal has not only gone against established jurisprudence but threatens the thriving Indian gaming start-up sector,” CAIT Secretary General Praveen Khandelwal wrote in the letter to Basavaraj Bommai as reported by The Hindu.

The instrument further requested the government to consider the impact of the law on Indian organizations and make suitable modifications, such as a ‘strong and stable regulatory mechanism for online skill games.’ The country presently has over 500 startups which provide online gambling services, with Dream11, PayTM First Games, Nazara and Mobile Premier League among the most popular ones.