Major real-money gaming platforms like Mobile Premier League, Paytm First Games and RummyCircle have suspended their services for users in Karnataka after state legislation prohibiting money wagering and betting was enacted on Tuesday.
The law, passed as part of an amendment to the Karnataka Police Act, bans all forms of online gambling and betting platforms. Even in apps like MPL, which have been ruled as ‘games of skill’ by several courts in India, the law prohibits money wagering.
According to the law, offenders will be subject to a maximum imprisonment of three years or a fine of up to Rs 1 lakh.
On Wednesday, users of MPL in Karnataka were greeted with the following message upon opening the app: “Sorry! The law in your state does not permit you to play Fantasy sports”.
MPL, RummyCircle and Nazara’s HalaPlay had also updated their respective terms of service to reflect that their service was unavailable in Karnataka.
Dream11 was still working in Karnataka at the time of publishing and it isn’t clear when the company will suspend its services in the state. Moneycontrol had first reported this. Its terms of service also doesn’t mention if users in Karnataka can use the app.
We have reached out to MPL and Dream11 for comment and will update the story when they respond.
To be sure, before Karnataka, states like Assam, Odisha, Nagaland, Sikkim, Meghalaya, Andhra Pradesh and Telangana had already outlawed online gaming apps.
Even though it is just one state, this is undoubtedly a big blow to platforms like MPL and Dream11, who have spent years in approaching several courts in India to establish jurisprudence that their platforms offer merely games of skill and not betting.
On top of that, the timing of the Karnataka law is unfortunate for these apps given that it is coming in the middle of the ongoing Indian Premier League season, which is when these apps see the highest amount of activity and traction.
A well-placed gaming industry source said that the industry is planning to sue the Karnataka government over the law, claiming that it goes against the jurisprudence established by multiple Indian courts, including the Supreme Court.
The Supreme Court in August had upheld a verdict by the Rajasthan High Court, holding that Dream11 was a game of skill and not chance.
“Given the unique nature of fantasy sports, the FIFS [Federation of Indian Fantasy Sports] members urge the [Karnataka] government to respect and align with the judicial and constitutional protections provided to its business activities,” the industry body FIFS had said in a statement earlier. Dream11 is the founding member of FIFS, which also counts MPL as one of its members.
However, a policy professional who has been tracking India’s online gaming ecosystem for years now noted that Karnaraka’s ban doesn’t include games of skill per say, but only their money wagering component, therefore posing a unique challenge to the industry.
“While there is enough jurisprudence to support that apps like Dream11 and MPL are games of skill, the Karnataka law is unique because it doesn’t ban these apps outright but only prohibits money wagering from a perspective of it being a financial risk to the individual using these apps,” this person said, requesting anonymity.