Karnataka To Formulate New Rules To Regulate Online Gaming

The Karnataka government has begun work on a new legislation to regulate online gaming platforms in the state. 

In a post on X, Karnataka IT minister Priyank Kharge said he held a detailed high-level meeting with industry stakeholders to discuss a legal framework for regulating the online gaming industry. The meeting was also attended by state home minister G Parameshwara, top government officials, members of online gaming federations and industry experts. 

“The intent of this legislation is to curb online gambling/betting and games of chance and protect consumers from fraud, while supporting innovation and sustainable growth of the skill-based gaming industry,” Kharge said. 

Speaking to the media after the meeting, Parameshwara reportedly said the state authorities will soon set up a panel, comprising officials and industry representatives, to submit a draft bill on the matter in a month.

As per news agency PTI, Parameshwara said that the government will formulate a legislation on the matter once the draft is finalised. He added that the proposed legislation will be modelled after the regulatory model of Chhattisgarh, which differentiates between gambling and skill-based gaming.

Meanwhile, Kharge, in the post on X, said that the “underground offshore” online gambling and betting market is growing rapidly and poses risks such as predatory money collection practices, dubious shell companies, financial fraud, data breaches and cyber crimes. 

Calling the “legitimate online skill-based gaming industry” a sunrise sector, Kharge added that the online gaming industry contributes INR 1,350 Cr in annual taxes to the state government. 

With this, Karnataka has become the latest state to kick off proceedings to oversee the online gaming sector. In February, the Tamil Nadu government notified the new online gaming rules, which effectively ban all minors from playing online real-money games.

Meanwhile, the Centre, too, has been working to bring the online gaming industry under its scope.Just a day ago, it was reported that the union government is finalising new rules which would bring online real-money gaming platforms under anti-money laundering laws. This would subject the companies to stricter obligations such as know-your-customer (KYC) requirements and tracking and reporting suspicious transactions.