Karnataka is set to introduce a four-member regulatory authority to oversee real-money gaming (RMG). It will also ban online betting involving games of chance. The move is proposed through an amendment to the Karnataka Police Act, 1963, which is expected to be tabled during the upcoming legislative session.

The new Karnataka Online Gaming and Betting Regulatory Authority will have the power to classify games as skill- or chance-based. It will issue licenses to skill-based gaming operators, monitor illegal platforms, and conduct public awareness campaigns. The authority will consist of a chairperson with experience in law, tech, or public administration, along with experts in IT, finance, and social welfare.

Online betting or gambling involving games of chance—using money, tokens, virtual currency, or digital payments—will be fully prohibited. However, skill-based games will be allowed under a strict licensing and compliance framework. Operators will need to follow rules such as KYC, anti-money laundering checks, limits on ads, user safeguards, and quarterly reporting. Licenses will be valid for three years and renewable.

Violations will attract severe penalties: up to 3 years in jail and a fine of Rs 1 lakh for operating illegal platforms. There will be up to 6 months in jail and a fine of Rs 10,000 for aiding or promoting such platforms. Platforms targeting vulnerable users or advertising without licenses will also face restrictions.

The state will work with the IT Department and Cyber Crime Branch to block unregistered platforms across websites, apps, and digital services. ISPs, search engines, and payment gateways will be required to cut access and financial links to illegal operators.

The bill includes a whistleblower protection clause, with rewards for those who help expose illegal betting networks.

This marks Karnataka’s second attempt to regulate online gaming. The High Court struck down its 2021 bill for failing to distinguish between games of skill and chance. Learning from that, the new proposal follows the model adopted by Tamil Nadu’s gaming regulator. It aligns with the broader national conversation on gaming laws.

Industry body E-Gaming Federation (EGF) welcomed the move. CEO Anuraag Saxena called it a “step toward regulatory certainty.” He praised the whistleblower clause as a strong measure to dismantle illegal operations and promote responsible gaming.

India’s gaming industry grew to $3.8 billion in FY24. Real-money gaming accounted for $2.4 billion of this total. The sector is projected to reach $9.2 billion by FY29, highlighting the urgent need for clear and consistent regulation across states.

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