The Karnataka High Court is busy with petitions against the state government’s recent legislative action against online gaming and with petitions asking it to legislate more in the same direction. Lotteries and horse racing stay out of turbulence.
The Industry is Group Challenging the Karnataka Police Act Amendment in HC
Junglee Games has joined the ranks of petitioners who have filed appeals before the Karnataka High Court against the state’s online gambling prohibition which came into force on October 5. The ban came through as an amendment to the Karnataka Police Act of 1963 (KPA) which expressly included games of skill in the outlawed forms of online gaming when the electronic transfer of money is involved.
Previously, writ petitions challenging the constitutional validity of the amendment bill were submitted at the Karnataka HC by the All India Gaming Federation (AIGF) – India’s apex body representing the online skill gaming industry – and an array of companies from the real money gaming sector.
The petitioners include the gaming unicorn Mobile Premier League (MPL), Games24x7 (RummyCircle, Carrom, My11Circle, Ultimate Games), Ace2Three (A23 Indian Rummy App), and the holder of the Guinness World Record for the largest rummy tournament globally Gameskraft (RummyCulture, RummyPartner, Gamezy).
Junglee is One of the First Indian Game Developers
The San Francisco-based game developer Junglee Games was launched in 2012 and currently has offices in New Delhi and Hong Kong. The company is a pioneer in the Indian gaming space and is best known for titles including Junglee Rummy, Jungly Teen Patti, EatMe.io, and fantasy sports platform Howzat. In March 2021, a majority stake of 50.1 percent in Junglee Games was acquired by Flutter Entertainment, an online betting giant created by the merger of Irish bookmaker Paddy Power and casino sites 10Cric.
Lotteries and Horse Races Exempt from KPA Amendment Bill
The Karnataka Police (Amendment) Bill (Bill No. 37 of 2021) expressly names lotteries and horse races as exceptions from its definition of “gaming”, even though the state’s government-run lottery was abolished back in 2007 and paper-ticket lotteries have been forbidden ever since. The government was able to do so after a 1999 ruling of the Supreme Court which found lotteries to fall outside the scope of “free trade”, and hence the sale of lottery tickets did not constitute a fundamental right.
A recently published research paper on the Indian lottery market analyzing geographically referenced Google Analytics data on organic searches and user flows established that states which do not have their own state-run lottery tend to supply heavier traffic to websites offering online lottery tickets. Karnataka is no exception scoring fourth after Maharashtra, Telangana, and Tamil Nadu and generating between 8.34 and 8.88 percent of the total user flow.
The Karnataka HC also Approached with PILs against Online Gambling and Fantasy Sports
A Public Interest Litigation (PIL) seeking a ban on online gaming and a separate PIL directed against FIFS-compliant online fantasy sports has been recently brought before the Karnataka High Court. The former was filed before the state’s Legislature Assembly adopted the KPA Amendment Bill, and the latter was submitted on October 8 by Rajasthan resident Saahil Nalwaya.
The PIL against fantasy sports has attracted as respondents the Karnataka government and the Federation of Indian Fantasy Sports (FIFS), a non-profit organization and self-regulatory body for fantasy sports in India. The PIL is seeking directions to be given to the Karnataka Government to further amend the KPA to define the offering and playing of fantasy sports as a criminal offense.
Even after the recent amendments to the KPA, “the respondent no. 1 (Karnataka government) had not prohibited the offering and playing of these online fantasy sports compliant with the charter of the respondent no. 2,” says the petition.
Serial petitioner Saahil Nalwaya had previously filed a similar PIL before the Rajasthan High Court which was dismissed with the following reasoning: “Since the result of fantasy game depends on skill of participant and not sheer chance, and winning or losing of the virtual team created by the participant is also independent of the outcome of the game or event in the real world, we hold that the format of online fantasy game offered by respondent No.5 is a game of mere skill and their business has protection under Article 19(1)(g) of the Constitution of India, as repeatedly held by various Courts and affirmed by the Hon’ble Supreme Court.”
The ruling of the Rajasthan High Court was later confirmed by the Supreme Court as no longer res Integra (unique) to the Union Apex Court.