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Karnataka’s online gaming bill could hurt jobs, says IAMAI

Karnataka's online gaming bill could hurt jobs, says IAMAI
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The Karnataka government’s proposal to ban online gambling will impact Indian skill gaming startups, which will also come under the purview of a Bill tabled in the state assembly last week, industry bodies said on Monday.

Karnataka said the proposed ban is to prevent gullible citizens from being exposed to the risk of losing substantial sums online.

The BJP-ruled state has proposed a set of amendments to the Karnataka Police Act, 1963, to prohibit all types of online gambling activities that involve exchange of money in digital or other electronic form. The amendments, however, exclude lottery and horse racing.

The Bill appears to have been drafted without considering the various legal and constitutional positions as it includes a wide definition of ‘gaming’ and is against various judgements by the Supreme Court and High Courts, industry body, the Internet and Mobile Association of India (IAMAI ), said in a statement.

Further, it makes no distinction between games of skill and of chance, industry bodies said.

In its current format, the proposed Bill would only impact Indian companies, while betting apps and games that are based outside the country would still be available to Indian gamers, they added.

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“A game of chance is pure gambling, which is addictive and should be dealt with adequate legal procedures. On the other hand, a game of skill enables gamers to monetize their gaming talents and finesse,” said Praveen Khandelwal, secretary general of the Confederation of All India Traders, in a letter to Karnataka chief minister Basavaraj Bommai.

“Once the Bill bans online skill games, law-abiding Indian companies will exit the market and the users will turn to…offshore and betting apps, which are harmful and dangerous,” he pointed out.

At present, Karnataka is home to more than 91 gaming companies and developers, which employ about 4,000 people, said Biren Ghose, chairman – CII National AVGC sub-committee.

AVGC stands for animation, visual effects, gaming and comics.

“The ban would impact Indian online gaming companies, while consumers would switch to games from other geographies. Further, this would impact the brands that have been built up with significant investments over the last few years,” he added.

IAMAI said that the Bill could hurt Karnataka’s position as the country’s startup hub and lead to loss of jobs and revenue.

All the online skill gaming platforms have put in place state-of-the-art technology to keep underage gamers in check, the All India Gaming Federation said.

“These online skill games sit on a bedrock of technology, which captures everything,” said Roland Landers, CEO of the All India Gaming Federation.

All gamers have to verify their identity through various online KYC mechanisms adopted by the skill gaming operators, especially if the online skill game involves any kind of transactions, he added.

Several industry bodies are currently working to put together a set of guidelines that can be implemented uniformly across states to prevent a situation where each state takes a different stance on online gaming.

Last month, the Madras High Court set aside a law promulgated by the Tamil Nadu government that banned online gaming.

Online gaming in India is expected to more than double to Rs 29,000 crore, with the number of gamers rising to 657 million by 2024-25, according to a KPMG report.

According to the report, the online gaming market size has been estimated at around Rs 13,600 crore in 2020-21, with 433 million gamers.

CAIT’s Khandelwal said that the ban will also prohibit Indian games like chess, archery, carrom, hockey and digital versions of traditional sports.

IAMAI said it was hopeful that Karnataka would take a progressive stand and bring the Bill in line with the judgments of the Supreme Court and various High Courts.

“Legislative actions such as this may create a cloud of confusion and create regulatory uncertainty, which may unintentionally result in investors recalibrating their investments in the state and many existing companies may consider shifting base from the state,” it said in a statement.

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