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Karnataka is getting ready to bring in a tougher online gambling law, one that the state hopes will finally close the loopholes letting illegal betting apps run unchecked. The new rules, according to the government, will draw a clear line between skill-based games and pure games of chance — and will be built to survive the kind of court challenges that have derailed previous efforts.
Expert Committee Drafting the Framework
Home Minister G. Parameshwara told the Assembly this week that an expert panel, headed by DGP Pranab Mohanty, is already working on a draft. That draft should land next month, after which the government will decide how to move forward. Alongside the new legislation, Karnataka still plans to push its case in the Supreme Court to revive the 2021 changes to the Karnataka Police Act — amendments that were struck down in early 2022 after the online gaming industry challenged them.
The issue has been bubbling for years. Without a solid legal framework, illegal gambling platforms have managed to operate freely, drawing in younger players and, in some cases, driving families into debt. Lawmakers from across the aisle have called it a serious social problem, not just a legal one.
Industry Support With a Call for National Action
Industry voices aren’t opposing the move. The All-India Gaming Federation has publicly supported Karnataka’s push, though it argues that state laws alone won’t be enough to deal with the offshore operators flooding the market. A national policy, they say, is the only real way to keep up.
For Karnataka, the balancing act is obvious. The state doesn’t want to hurt its legitimate skill-gaming industry, which contributes more than ₹1,300 crore a year in taxes and accounts for about a quarter of the national market. India’s overall skill-based gaming sector is growing fast — worth around $4 billion and employing over 150,000 people — and is seen as one of the country’s rising tech-driven industries.
Working Within National Tax Rules
There’s also the tax factor. Since July 2023, online gaming, casinos, and racecourses have been taxed at 28% of the full face value of bets. Any new state law will have to mesh with that national policy while tackling the harm caused by unregulated platforms.
If Karnataka gets this right, the new framework could become a model for other states trying to curb illegal betting without shutting down a booming, job-creating industry.
