Karnataka Bans Online Gambling

Online gambling in India will remain relatively unaffected after the state of Karnataka online gambling ban takes effect in mid-September (Photo by Ishant Mishra on Unsplash)

In Karnataka, which is a state in the southwest of India, the state’s government decided on Saturday that it will ban online betting or gambling, but still allow online lottery and betting on horses – according to an India Today news publication.

The move is in the opposite direction to how many thought the online gambling market in India would go, considering the many iGaming trade fairs and publications pushing towards a fully regulated market over the past 2 years. However, India has 29 states, and there are also 7 union territories. Only 3 state governments have banned online gambling so the market is still wide open with many other state governments looking towards online gambling in a positive light and the fact that it could bring in much-needed tax revenue as well as bring India’s tech market into the forefront of iGaming and sports betting technology.

India’s Parliamentary Affairs Minister, JC Madhuswamy, announced that it was the state government’s intention to end online gambling by revising the Karnataka Police Act, 1963. This is to include all betting or wagering using tokens, electronic payments/transfers and virtual currencies that carry a monetary value. According to the minister, the amendments had been approved and would be put before the assembly. That statement would appear to include cryptocurrency, although the entire country’s stance on virtual currencies is yet another issue that remains ambiguous and outside the scope of this report.

There are a few exceptions in place. Gambling on horse races at any racecourse outside or within the state will not be part of the ban, along with any lotteries. In July, the state government had told the High Court that it had drawn up a bill to outlaw all types of web-based wagering and betting. We can assume the report is referring to horseracing tracks and events in India, while it is likely bets on horse racing in other countries may still be banned in the state. Horse racing in India has a 200+ year history, and the new law means bets on events such as the Royal Calcutta Turf Club, Mahalaxmi Racecourse, Pune Race Course, Guindy Race Course, Bangalore Race Course, and other top venues look like they will still be permitted both online and offline.

The reform bill will be submitted in the impending meeting of the governing body starting on September 13. Karnataka is the largest state in the south of India and has Bangalore as its capital.

How Will Licensing Authorities React to the Indiana State’s Surprise Ban?

There are already many software providers that have casino game titles designed for India’s gambling-friendly populations. Many of the games stream through casinos in Europe that accept INR and online casino players from India. For example, 21 Casino offers games such as Andar Bahar and Teen Patti, which are popular games in India, while the casino accepts deposits and gameplay in INR via deposit methods such as Indian Net Banking and UPI. Players that are living in the state of Karnataka will be breaking the law if they continue to gamble here. Many online casinos, like the aforementioned 21 Casino, offer online gambling to players in India.

In light of this latest news, it is highly likely the MGA will respect Karnataka state laws and inform all casinos under its licensing to cease to allow players from the state to place real money bets. If this is the case, the Maltese authority will also instruct those players to cash out. On the other hand, casinos under the Curacao eGaming license will probably still accept players from the region.

Is this a reasonable assumption? The reasoning behind these assumptions is because the MGA tends to respect government laws as it has shown with countries like Australia, whereby any casino licensed by the MGA is forbidden from offering online real money gaming services to citizens of Australia. On the other hand, the Curacao eGaming licensing authority does not place such bans on casinos under its framework. Still Curacao licensed casinos offer services to citizens in Germany, Spain, Australia, and many South East Asian countries where to offer online gambling services either requires a domestic license or online gambling is wholly outlawed. It is unlikely the authority will make any kind of adjustments in reaction to the latest changes in laws within India’s Karnataka state.