Firms prep Article 19 challenge to gaming ban at Karnataka HC this week

The online money gaming industry, which generated nearly $3 billion in revenue until the last fiscal, is hoping for a partial strike-down of the law that has already received the President’s assent—and only waits for a formal Gazette notification to be brought into effect. Key grounds in its arguments include the constitutionality of the law, as well as parity with real-world equivalent offerings.

Gameskraft Technologies is one of the five companies associated with the filing; each of the three cited above said, requesting anonymity since the appeal has not been filed yet. “We are closely monitoring the regulatory developments, and no decision regarding litigation or otherwise has been made yet. Our cross-functional teams are actively exploring new opportunities and future-ready solutions that align with the evolving legal landscape,” a company spokesperson said.

“The court filing is being prepared for Thursday at the Karnataka High Court, which has previously delivered favourable rulings toward the online gaming sector, and is a single-judge bench. The industry’s appeal will seek to strike down the law by citing Article 14 and Article 19 of the Constitution of India, which largely underlines the new law’s lack of parity with an entity’s fundamental right to pursue a profession,” one of the people cited above said.

A second person closely associated with the industry added that the filing is likely to target only a select part of the law, namely Chapter III of the Promotion and Regulation of Online Gaming Act, 2025, by showcasing aspects of parity between the games and their real-life counterparts. Clauses 5-7 of the Act impose bans on operation, advertisement, and financial transactions on any game that involves money.

“The law failed to take into account the fact that there have been multiple court rulings that have clearly delineated the difference between a game that needs skill to win, versus one that is based only on chance. While fantasy sports have not yet been given a clear verdict on its requirement of skill at any court, it is important to note that for those games that have, a blanket regulation based on money as the medium may not be the ideal representation of law,” the second person added.

A week after the proposed bill was enacted into law by clearing both Houses of Parliament at a brisk pace, the money gaming industry has started issuing notices of pivots in various cases. Dream11, the largest entity of the industry accounting for nearly 30% of the industry’s revenue, hosted a town-hall where employees were alerted to a move away from money games to other avenues such as content streaming and other areas,Mint reported Friday.

The Union government, to be sure, is set to notify the law imminently. S. Krishnan, secretary at the ministry of electronics and information technology (Meity), told Mint in an interview Friday that the government “is ready for any legal challenge that the industry may raise to the law…it does not target any specific entity, but addresses key areas that had so far remained unregulated.”

Industry stakeholders said that the legal challenge may face close scrutiny, unless broken down with nuance.

“The gaming law seeks to prohibit betting and gambling, or in other words, prohibit money being applied as a chance to win in any online game. The fact that the regulatory pendulum has completely swung towards a heavy handed prohibition is perhaps understandable since the real money gaming sector did fail to match up to to the expectations of a light touch regulatory regime that the government initially framed a few years ago under the IT Act, when industry failed to nominate SRO’s that didn’t suffer from a conflict of interest,” said Suhaan Mukerji, founding partner at PLR Chambers.

Mukerji added that as “an initial next step”, the Centre “may permit bridge, chess and rummy—since as of today only these three activities, apart from horse racing, continue to be legitimate commercial activities per the Supreme Court.”

“One may also mention poker as one additional activity that has been accorded very specific statutory protection as a legitimate commercial activity in some states for a number of decades. Initially permitting only these activities in the online sphere, since they aren’t restricted today in the offline world, would be welcome, of course, with restrictions similar to those we have seen in other sectors on FDI, data processing and storage, compulsory citizenship requirements of directors and owners,” he further added.