The Karnataka High Court’s verdict on February 14 declaring as unconstitutional certain provisions of the Karnataka Police (Amendment) Act, 2021, which prohibited and criminalised the offering and playing of online games, is the third significant judicial validation for the sector in the last seven months. This decision comes close on the heels of verdicts by the Madras and Kerala High Courts. All three High Courts have reaffirmed the Supreme Court jurisprudence that games of skill and games of chance (gambling) are two distinct legal concepts of constitutional significance, and that the former are legitimate business activities protected under our fundamental rights.
Bans despite precedents
The Stare Decisis goes back to the famous Chamarbaugwala cases ( The State Of Bombay v. R.M.D. Chamarbaugwala and R.M.D. Chamarbaugwalla v. The Union Of India), wherein the apex court held that in any game, if the element of skill is dominant over the element of chance (a yardstick known as the preponderance test), then it is a game of skill and cannot be construed as gambling. Over the years, using this standard, the Supreme Court and various High Courts have held several games including rummy, fantasy sports, bridge, chess and horse racing to be games of skill. This position is also reflected in the Gambling Acts of most State governments, which often state: ‘Nothing in this act shall apply to any game of mere skill’.
