In October, fantasy sprots operator Dream 11 announced that its operations in Karnataka were suspended. The company took this action in order to comply with the state’s new online gambling law which came into effect on 5 October 2021.
Dream 11 is not the only brand affected by the new law with all online real-money gaming providers and casinos being hit. This is a blow for the growth of new offshore online casinos in India which increased dramatically through 2020 and into 2021, as reported by thenewsminute.com. Legal changes like this are unlikely to stop the growth of online casinos and real cash games but they may have an adverse effect on this growth.
Taking a look at the legal situation in Karnataka provides insight into the challenges that have been created by the new law.
The legal reasons why casinos and fantasy sports operators are excluding Karnataka players
When the Karnataka government announced its new online gambling law, it meant that online gambling became an offence in the state. This offence is punishable by fines up to Rs 1 lakh and a prison sentence of up to three years.
The law applies to all online games that make use of “electronic means and virtual currency, electronic transfer of funds in connection with any game of chance.” As a result, providers of these games have provided messages on their websites and apps to inform people in the state they are no longer allowed to play.
Some providers geo-blocking players
Some online casinos and real cash game providers have geo-blocked players in Karnataka. This makes it impossible for people within the state to play games on these sites or apps. In the case of Dream 11, the situation is slightly different. The company has banned only players who have a bank account within the state.
This means that it’s technically possible for people from other states, who have a bank account outside of Karnataka, to play online even if they are currently within the state. Although the company has provided a message to players saying they are not allowed to participate in real cash games if they live in Karnataka.
Law facing a challenge
On 22 October 2021, the High Court in Karnataka told the Advocate General that no arrests should currently be made under the new online gambling law. This is due to the fact that there is a legal challenge to the law by six petitioners including the All India Gaming Federation.
It remains to be seen what the result of this challenge will be. Gaming and online casino operators will be watching events with interest. This is especially the case at a time when there are opportunities for operators to expand their enterprises to appeal to an enthusiastic Indian audience.
Fans of online real cash games and casinos will also be interested to see the results of the legal challenge as they may have an effect on their gaming experiences going forward.