The law to ban all online real money games faced its first legal challenge within days of the hurriedly moved Bill receiving the President’s assent.
Questioning the legislative competence of the Centre, Head Digital Works, a company offering games like Rummy and Poker, has moved the Karnataka High Court, seeking a stay on key sections of the Online Gaming Act, 2025.
According to the petition filed this week, the Act is contrary to the principles laid down by the Supreme Court, and the rulings of the High Courts of Karnataka, Madras and Kerala. The statute, it says, is against the settled legal position for close to seven decades that games of skill are legitimate business activities protected by Article 19(1)(g) of the Constitution and wagers placed on games of skill does not amount to gambling.
Describing the new law as arbitrary and unreasonable, the petitioners said that it imposes a restriction on freedom and violates the right to livelihood and choice.
“As established by the Supreme Court, it is settled law that games of skill (involving risking of money or otherwise) are a legitimate business activity protected under Article 19(1)(g) of the Constitution. Therefore, the State cannot completely prohibit such activities and any restrictions placed on these activities must be proportionate and reasonable, within the parameters of Article 19(6),” say the petition.
Head Digital Works, with 600 full-time employees and corporate offices in Bengaluru and Hyderabad, also deals in creative arts, multimedia, animation, web designing, and programming of related software. Clairvest Group Inc, a Canadian private equity management firm, had invested in the company.
Officials in the gaming business have been pointing out that the activity is a state subject. In this context, the petition says that while the Parliament has power over communication infrastructure like posts and telegraphs, telephones, wireless, and broadcasting, it does not extend to regulating all content passing through these mediums and all human activity conducted through these mediums.
Online Rummy, according to the company, is no different from physical rummy other than the fact that the game is played virtually where the cards are distributed using the 'random number generator' software that cannot be modified or tampered.
The sudden introduction and passage of the Act was a volte face by the government, said the petition. “Since inception, the online skill gaming sector has been encouraged by the Union of India. Specifically, the Hon'ble Prime Minister, in his 15 August 2024 Independence Day address, called gaming a "big emerging market", and in April of the very same year, he had interacted with top gamers in the Country, during which time he acknowledged that gaming has been taken up as a viable career option by young people,” it claims.
The petition points out that on March 26, 2025, during a Lok Sabha debate, the minister concerned had stated that the question of banning online gaming would have to be addressed by state governments.
The new Act distinguishes between e-sports, online social games, and online money games while imposing a blanket ban on the third category. However, the petitioner believes that the law only makes a “vague distinction” as "e-sports" has been narrowly defined with restrictive conditions that would be difficult to meet.
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Questioning the legislative competence of the Centre, Head Digital Works, a company offering games like Rummy and Poker, has moved the Karnataka High Court, seeking a stay on key sections of the Online Gaming Act, 2025.
According to the petition filed this week, the Act is contrary to the principles laid down by the Supreme Court, and the rulings of the High Courts of Karnataka, Madras and Kerala. The statute, it says, is against the settled legal position for close to seven decades that games of skill are legitimate business activities protected by Article 19(1)(g) of the Constitution and wagers placed on games of skill does not amount to gambling.
Describing the new law as arbitrary and unreasonable, the petitioners said that it imposes a restriction on freedom and violates the right to livelihood and choice.
“As established by the Supreme Court, it is settled law that games of skill (involving risking of money or otherwise) are a legitimate business activity protected under Article 19(1)(g) of the Constitution. Therefore, the State cannot completely prohibit such activities and any restrictions placed on these activities must be proportionate and reasonable, within the parameters of Article 19(6),” say the petition.
Head Digital Works, with 600 full-time employees and corporate offices in Bengaluru and Hyderabad, also deals in creative arts, multimedia, animation, web designing, and programming of related software. Clairvest Group Inc, a Canadian private equity management firm, had invested in the company.
Officials in the gaming business have been pointing out that the activity is a state subject. In this context, the petition says that while the Parliament has power over communication infrastructure like posts and telegraphs, telephones, wireless, and broadcasting, it does not extend to regulating all content passing through these mediums and all human activity conducted through these mediums.
Online Rummy, according to the company, is no different from physical rummy other than the fact that the game is played virtually where the cards are distributed using the 'random number generator' software that cannot be modified or tampered.
The sudden introduction and passage of the Act was a volte face by the government, said the petition. “Since inception, the online skill gaming sector has been encouraged by the Union of India. Specifically, the Hon'ble Prime Minister, in his 15 August 2024 Independence Day address, called gaming a "big emerging market", and in April of the very same year, he had interacted with top gamers in the Country, during which time he acknowledged that gaming has been taken up as a viable career option by young people,” it claims.
The petition points out that on March 26, 2025, during a Lok Sabha debate, the minister concerned had stated that the question of banning online gaming would have to be addressed by state governments.
The new Act distinguishes between e-sports, online social games, and online money games while imposing a blanket ban on the third category. However, the petitioner believes that the law only makes a “vague distinction” as "e-sports" has been narrowly defined with restrictive conditions that would be difficult to meet.
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- Gaming is a state subject; a central law can’t ban it.
- Curbs freedom, violates the right to livelihood & choice
- New law is arbitrary & unreasonable
- Govt has done a volte face
