The Karnataka High Court will hear on August 30 the plea of A23 and others challenging the new law imposing a ban on online money games.
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KARNATAKA: The Karnataka High Court on August 30 will hear the petitions filed by leading online gaming platform A23 challenging the newly enacted Promotion and Regulation of Online Gaming Act, 2025. The petitions were urgently mentioned by Senior Advocates C Aryama Sundaram and Dhyan Chinnappa, highlighting the sweeping implications of the controversial law.
The matter was placed before Justice B M Shyam Prasad, who directed that it be listed for hearing on Saturday.
Online gaming company A23 has become the first to legally challenge the government’s new ban on online money-based games at the Karnataka High Court. The law, enacted last week, has forced platforms like Dream11 and Mobile Premier League (MPL) to suspend money games, putting the multi-billion-dollar industry’s future in jeopardy.
In its petition, A23 argued that the ban “criminalises legitimate skill-based games” like rummy and poker, calling the law an act of “state paternalism”. The company urged the court to declare the legislation unconstitutional for games of skill.
While MPL and Dream11 have opted not to challenge the ban, despite losing the majority of their revenues, A23 is pressing ahead, framing the law as a direct threat to innovation, investment, and the livelihoods tied to India’s gaming sector.
The government has defended the law as necessary to curb addiction, financial harm, and social evils, maintaining that a blanket prohibition is in the public interest.
What the New Law Says
The Promotion and Regulation of Online Gaming Act, 2025, received Presidential assent on August 22 after being passed by Parliament on August 20 (Lok Sabha) and August 21 (Rajya Sabha). The law marks a historic shift in India’s gaming policy by discarding the long-standing judicial distinction between “games of skill” and “games of chance”. Now, any online game involving monetary stakes will be prohibited.
Key provisions include:
- Cognisable & Non-Bailable Offences: Running online money games or enabling financial transactions linked to them is now a serious offence. Police can arrest without a warrant and conduct searches without prior approval.
- Harsh Penalties: Offenders face up to 3 years imprisonment and fines of Rs 1 crore. Repeat violators may face mandatory minimum sentences and fines of up to Rs 2 crore.
- Ban on Payment Facilitation: Banks, payment providers, and intermediaries cannot process transactions linked to prohibited games.
- National Regulatory Authority: A statutory body will be set up to classify games, register platforms, and enforce compliance.
- Recognition of E-Sports: Competitive e-sports and non-monetary social/educational games are excluded and will be promoted under new policy frameworks.
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Government’s Justification
The government has defended the law, citing public health, financial security, and national security risks. The Statement of Objects and Reasons points to:
- Addictive and manipulative design features in money games.
- Cases of indebtedness, financial ruin, and psychological harm, especially among youth and low-income groups.
- Links between gaming platforms and money laundering, tax evasion, and terror financing.
- Difficulties in regulating offshore operators at the state level.
The Centre concluded that a complete prohibition was more effective than regulation.
The Legal Challenge
However, legal experts argue that the new law faces significant constitutional hurdles. Senior Advocate Abhishek Malhotra noted that Indian courts have consistently recognised skill-based gaming as a legitimate, protected activity. By erasing the distinction between skill and chance, the Act may be vulnerable under Article 14 (Right to Equality) of the Constitution.
Moreover, Malhotra criticised the criminalisation approach. Until recently, the government taxed skill games under a lower GST bracket, implicitly recognising their legality. Moving from a regulatory-taxation model to outright criminalisation, he argued, is an abrupt and harsh policy reversal.