India: Karnataka to draft new law regulating online gaming and betting

The state of Karnataka in India is preparing to introduce new legislation aimed at regulating online gaming and betting, state ministers confirmed this week, marking a renewed push to rein in illegal betting platforms while allowing skill-based gaming under a controlled legal framework.

A draft bill is expected to be submitted within a month by a committee comprising senior officials and industry representatives, Home Minister G. Parameshwara said after a high-level meeting held Tuesday. The proposed legislation mirrors Chhattisgarh’s regulatory model, which distinguishes between games of skill and games of chance.

Information Technology and Biotechnology Minister Priyank Kharge emphasized that the law aims to protect consumers while driving innovation. “The intent of the new law is to curb online gambling, betting, and games of chance, and protect consumers from fraud while supporting innovation and the sustainable growth of the skill-based gaming industry,” Kharge said.

Kharge cited industry data estimating India’s skill-based gaming sector to be worth $4 billion, contributing ₹12,000 crore ($1.44 billion) in taxes and supporting over 150,000 jobs nationwide. Karnataka alone accounts for 25% of the market and generates ₹1,350 crore annually in taxes, he said.

However, Kharge warned of growing risks from black market activity. “Alongside the legitimate sector, there is a parallel underground market that is expanding rapidly, posing risks such as predatory money collection practices, dubious shell companies, financial fraud, data breaches, and cybercrimes,” he said.

Industry bodies, including the E-Gaming Federation, All India Gaming Federation, and the Federation of Indian Fantasy Sports, have also been consulted. These groups have proposed a “code of ethics” for member platforms to promote user safety and responsible gaming.

Meanwhile, Bengaluru police have ramped up surveillance during the Indian Premier League (IPL) season to crack down on illegal betting activity. Cybercrime and Central Crime Branch (CCB) units have been deployed to monitor suspicious mobile applications and activity around the M. Chinnaswamy Stadium.

“We are taking strict action against those involved in both offline and online betting. Our main concern is with unregistered gaming and betting apps,” a senior officer from the Central Crime Branch said.

Authorities have raised concerns about youth falling prey to unregulated platforms that promise quick money. “With little to no regulation, users often end up losing large sums, sometimes falling into debt. These apps operate without accountability, making it difficult for victims to recover lost funds. Such platforms can also be a gateway to more serious forms of financial fraud and addiction,” the official added.

Karnataka’s renewed push follows the failure of a 2021 attempt by the previous BJP government to ban online games through an amendment to the Karnataka Police Act. The law was later struck down by the High Court.

At the time, then-Chief Minister Basavaraj Bommai defended the effort, saying: “There is a lobby behind this. We did our groundwork and made laws.” However, he lamented the ease with which offenders secured bail: “If the police conduct raids and arrest culprits, they make bail by the evening.”