Lawmakers in Karnataka Ready Tougher Online Gaming Regulations

Lawmakers in Karnataka are intensifying efforts to combat illegal online gambling by introducing new legislation aimed at clearly distinguishing between skill-based games and those based purely on chance.

Spurred by recommendations from an expert panel, the proposed law seeks to plug loopholes, enforce stricter licensing, and hold operators accountable for unlawful practices. While regulated online platforms could still thrive under the new framework, industry insiders note that many players may look beyond domestic options in search of safer, compliant sites offering transparency and attractive rewards like the best no deposit casino bonuses. The legislation is expected to generate debate between consumer protection advocates, who welcome the move, and industry stakeholders, who warn against overly restrictive measures that could stifle innovation.

According to Home Minister G. Parameshwara, 347 legal cases related to online betting have been registered in the state since 2023, including 159 in just the first seven months of 2025. He also criticized the aggressive marketing tactics employed by gaming companies, often featuring celebrities and sports figures, which have contributed to the unchecked growth of the unregulated gambling sector.

Ongoing Struggle

This isn’t Karnataka’s first attempt to regulate India’s online gambling space, having faced repeated legal setbacks. In 2022, the Karnataka High Court struck down amendments to the Karnataka Police Act that aimed to ban online gaming, after the All-India Gaming Federation (AIGF) argued the changes failed to distinguish between games of skill and games of chance. The court agreed, declaring the amendments unconstitutional. Although the state has appealed the decision to the Supreme Court, a final verdict is still pending.

Learning from past missteps, the new legislation is being crafted to be more legally sound. Home Minister G. Parameshwara confirmed that the revised law will clearly differentiate between skill-based games and gambling, addressing the constitutional issues that undermined previous efforts. A panel of experts, led by senior IPS officer Pranab Mohanty, has been tasked with delivering a detailed set of recommendations, expected next month. Once received, the government plans to move forward with laws aimed at creating legal clarity, strengthening accountability, and imposing tighter control over the online gaming sector.

However, while the AIGF supports stronger regulation, it has cautioned that state-level efforts may fall short, particularly when it comes to dealing with offshore betting platforms that operate beyond India’s legal reach.

Call for Action

India’s gaming sector has increased rapidly, projected to double from $4.5 billion to $9 billion within three years. IT and Biotechnology Minister Priyank Kharge highlighted that Karnataka alone contributes roughly 25% of that revenue. Given the industry’s scale and complexity, Kharge called for collaborative efforts between central and state governments to establish a unified national regulatory framework that balances innovation with player protection.

This call for action follows last year’s protest that broke out in Kalaburagi, Karnataka, as local activists demanded that the government take decisive action against online rummy platforms. The demonstration, organized by the social advocacy group Namma Karnataka Sene, took place outside the District Collector’s office and highlighted the growing social and financial issues tied to online gambling.

Protesters claimed that many young people, particularly from marginalized communities, had been lured into wagering real money through these digital games, with some falling into serious debt. The group warned of rising addiction levels and accused authorities of ignoring formal complaints filed with local police stations in Kalaburagi and Yadgir.

The Message is Clear

With mounting concerns over addiction and the economic strain caused by unregulated online gambling, Karnataka is recognizing the urgent need for decisive governmental action. The 2022 ruling by the Karnataka High Court, which struck down the broad prohibition on online gaming, has provoked renewed efforts toward a more nuanced and enforceable legal framework.

Advocacy groups continue to sound the alarm over the social and financial damage inflicted by unchecked gaming, arguing that the current lack of regulation enables exploitation. In response, policymakers have confirmed that fresh legislation is in development.

However, reform efforts must be carefully balanced to safeguard the legitimate skill-gaming sector, which contributes over ₹1,300 crore in annual taxes and accounts for roughly 25% of India’s national gaming market. The broader Indian skill-based gaming industry is flourishing, valued at approximately $4 billion and supporting more than 150,000 jobs, emerging as one of the country’s most promising tech-driven growth sectors.

As the state crafts new rules, it’s essential that they focus on curbing illegal gambling while protecting the skill-based gaming industry, which operates within legal boundaries and drives significant economic and technological growth.