Karnataka High Court to hear online money gaming ban challenge on August 30

New Delhi: The Karnataka High Court will hear on August 30 petitions filed by online gaming company A23 challenging the Promotion and Regulation of Online Gaming Act, 2025, which bans all forms of online money gaming in India, according to Bar and Bench.

The pleas were mentioned for urgent hearing on Wednesday by Senior Advocates C Aryama Sundaram and Dhyan Chinnappa.

The Act, which received presidential assent from Droupadi Murmu on August 22, outlaws online money games irrespective of whether they are based on skill or chance. The legislation was passed by the Lok Sabha on August 20 and by the Rajya Sabha on August 21.

By removing the distinction between “games of skill” and “games of chance,” any game involving monetary stakes now falls under the prohibition.

The legislation treats running online money games or processing related financial transactions as serious offences, allowing police to arrest without a warrant and conduct searches without prior approval. Offenders may face up to three years in prison and fines of Rs 1 crore, with repeat offenders liable to harsher punishment, including mandatory minimum sentences and fines up to Rs 2 crore.

Banks, payment providers and intermediaries are barred from processing transactions related to prohibited games. A statutory authority will register and classify games, issue directions, and oversee compliance. Competitive e-sports and social or educational games without monetary stakes are to be promoted and integrated into policy frameworks.

The government has justified the sweeping ban by citing public health, financial security and national security concerns. The Statement of Objects and Reasons highlights risks including manipulative and addictive game designs, cases of financial ruin and psychological harm, and links between online gaming platforms and money laundering, tax evasion, and terrorism financing. The Centre has stated that “it is prudent and practical in the interest of the general public to completely prohibit the activity, rather than attempt regulation.”

Legal experts have raised concerns about the law. Senior Advocate Abhishek Malhotra observed that Indian jurisprudence has historically distinguished between games of skill and games of chance, with skill games recognised as legitimate. By removing this distinction, he said the law raises questions under Article 14 of the Constitution, treating protected forms of creative and strategic expression on par with gambling.

As per the report, Malhotra also noted the designation of related offences as cognisable and non-bailable could be excessively harsh, stating that “the government had until recently acknowledged skill gaming as legal and taxed it under a lower GST slab. The shift from regulating and taxing to outright criminalisation represents an abrupt reversal of policy.”