Karnataka HC Seeks Centre’s Response on Online Gaming Act, 2025

The Karnataka High Court, led by Justice B.M. Shyam Prasad, has issued a notice to the Union government, seeking its response to a petition by Head Digital Works Pvt. Ltd., operator of A23 Rummy and Poker, challenging the Promotion and Regulation of Online Gaming Act, 2025. The law, which bans all online money games regardless of skill or chance, threatens to devastate an industry employing over two lakh people and risks ₹23,440 crore in investments, petitioners argue. The court scheduled the next hearing for September 8, 2025, to consider interim relief.

Senior Advocates C. Aryama Sundaram and Dhyan Chinnappa, representing A23, argued that the Act, despite receiving Presidential assent on August 22, remains unnotified. They urged the court to delay its enforcement or mandate a week’s notice, warning of “serious backlash” if the industry shuts down overnight. Solicitor General Tushar Mehta, defending the Centre, countered that notification is a constitutional duty post-Parliamentary approval and courts cannot typically intervene preemptively. He noted the Act’s cross-border implications, marking it as a novel judicial test.

The petition contends that the Act’s blanket prohibition on skill-based games like rummy violates Articles 14, 19(1)(a), 19(1)(g), 21, and 301 of the Constitution, disregarding Supreme Court precedents that protect such games as legitimate businesses. It alleges the law’s passage without stakeholder consultation reverses prior government support for skill-gaming, risking economic disruption and driving players to unregulated offshore platforms, potentially fueling money laundering.

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Karnataka’s IT Minister Priyank Kharge criticized the Act as a “knee-jerk ban,” estimating a ₹20,000 crore loss in GST and income tax revenue and threats to 2,000 gaming startups. The Act’s penalties—up to three years’ imprisonment and ₹1 crore fines for operating money games—are deemed disproportionate. While it promotes e-sports and social games, its broad ban has sparked debate, with states like Karnataka and Tamil Nadu questioning the Centre’s authority over skill-based games.

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