Indian state Karnataka to regulate online gambling with new law
The Karnataka government is drafting new legislation to regulate online gambling and betting platforms. The move aims to curb fraud, enhance user safety, and support the state’s fast-growing legal online gaming sector, officials said on Wednesday.
Home Minister G. Parameshwara announced the formation of a committee to prepare the draft law within a month. The panel includes senior government officials and representatives from the gaming industry.
“There is currently no regulation for these platforms. Industry representatives have agreed on the need for licensing and a proper legal framework,” said Parameshwara after a joint meeting with the IT minister.
Draft to focus on regulation, not blanket ban
The new law will be modelled on Chhattisgarh’s regulatory framework, which makes a clear distinction between games of skill and games of chance. While the government plans to prohibit chance-based gambling, it intends to support innovation and growth in skill-based online gaming.
IT and Rural Development Minister Priyank Kharge, who is also involved in drafting the bill, said the key objective is user protection.
“The proposed law is designed to prohibit games of chance while supporting innovation and the growth of skill-based online gaming,” he said.
He further added the intention is to “protect users from financial fraud and exploitation” while ensuring the “legitimate gaming industry continues” to thrive.
Karnataka’s role in India’s gaming economy
Kharge highlighted Karnataka’s central role in the country’s online skill gaming market. He said the legal gaming sector in India is now worth $4 billion and contributes ₹12,000 crore ($1.44 billion) in taxes annually.
“Karnataka contributes ₹1,350 crore ($162 million) in taxes and accounts for 25 percent of the market. The industry supports over 1.5 lakh jobs, making the state a key hub,” Kharge noted.
Crackdown on illegal platforms
Despite an existing ban on online betting and certain gaming apps, many unregulated platforms continue to operate across the state, including offshore websites. Officials raised concern over the growth of these illegal operations and the risks they pose.
“We’re seeing predatory money collection, shell companies, financial scams, and cybercrime linked to these platforms,” Kharge said. “What is illegal must be banned first. If platforms are legal, we will regulate them appropriately.”
The government also pointed out gaps in enforcement of current laws and stressed the need for stronger action to protect users from fraud.
Industry input and code of ethics
Kharge said consultations have been held with major industry bodies including the E-Gaming Federation (EGF), All-India Gaming Federation (AIGF), and Federation of Indian Fantasy Sports (FIFS).
These bodies have created a common ‘Code of Ethics’ for the sector. The government plans to use this as a reference for shaping the new law.
The committee is expected to submit the draft within a month, after which the proposed legislation will be introduced in the state assembly.
