Gaming operator moves Karnataka HC against Central Act banning money-based online games

Bengaluru | Operator of 'A23 Rummy', Head Digital Works on Thursday moved the Karnataka High Court against the recently passed Central Act banning money-based online games, making it the first instance of a company knocking the doors of judiciary against the legislation.

The HC will take up the petition, questioning the validity of the Promotion and Regulation of Online Gaming Act, 2025 on August 30.

The matter was mentioned before Justice B M Shyam Prasad, who directed that it be listed for hearing on Saturday.

The law, which received Presidential assent on August 22 after being cleared by both Houses of Parliament, prohibits the operation of "online money games" and restricts associated banking services and advertisements.

The prohibition extends not only to games offered within India but also to platforms operating from outside the country.

Under the Act, an "online money game" refers to any internet-based game -- whether of skill, chance, or a combination -- where players pay a fee, stake, or deposit money with the expectation of monetary or other rewards.

The only exclusions are e-sports and online social games recognised for educational or recreational purposes.

"Online money gaming service" is defined as any service enabling participation in such games. Violations invite up to three years' imprisonment, fines up to Rs 1 crore, or both. Advertising such games is punishable with a prison term of up to two years or a fine of up to Rs 50 lakh.

The law also provides for the creation of a Central Authority empowered to determine whether a particular game qualifies as an "online money game". It also authorises designated officers to carry out searches and arrests without warrants if there is reasonable suspicion of a violation.

Additionally, non-compliance with certain provisions may lead to websites and platforms being blocked under the framework of Section 69A of the Information Technology Act, 2000.

While banning money-based gaming, the Act makes space for the recognition and promotion of e-sports -- defined as competitive multiplayer online games conducted in organised formats, with outcomes determined by physical or mental skills such as dexterity, agility, or strategic thinking.

Participation fees and prize money are permitted, but betting or wagering of any kind remains prohibited.