FACTS
- Govt. of Karnataka amended the Karnataka Police Act, 1963 through which it absolutely banned online gaming involving monetary stakes in the state.
- The said amendment by the state completely banned all kind of games whether it is a game of skill or chance and criminalized the use of computers, communication devices, or cyberspace for any kind of online or offline betting, wagering, or gambling.
- It criminalised betting, wagering and gambling whether by playing a game of chance or skill. It also included the use of cyberspace including computer resources or any communication device as defined in the Information Technology Act, 2000 in the process of gaming, to curb the menace of gaming through the internet, mobile app, to enhance the punishment for gaming for the orderly conduct of citizens and to wean them away from the vice of gambling.
- This invited a bunch of writ petitions from various associations before the high court of Karnataka under Art.226 questioning the constitutionality and legality of the amendment of the impugned act.
ISSUE RAISED
- WHETHER THE STATE HAS LEGISLATIVE COMPETENCE TO ENACT SUCH AN AMENDMENT?
- WHETHER THE ACT IS MANIFESTLY ARBITRARY?
- WHETHER ANY FUNDAMENTAL RIGHTS OF THE PUBLIC HAVE BEEN VIOLATED BY SAID ACT?
CONTENTIONS
ARGUMENTS BY THE PETITIONER
(i) Lack of legislative competence since the Amendment Act does not fit into Entry 34, List II, Schedule VII of the Constitution of India.
(ii) Violation of fundamental right to freedom of speech & expression guaranteed under Article 19(1)(a) since playing games & sports of skill is a facet of speech & expression and that criminalizing apart from amounting to unreasonable restriction, is incompetent under Article 19(2).
(iii) Violation of fundamental right to profession/business guaranteed under Article 19(1)(g) read with Article301 i.e., incompetent & unreasonable restriction vide Chintaman Rao v. State of Madhya Pradesh, Mohd. Farooq v. State of Madhya Pradesh, game of skill not being a res extra commercium (Chamarbaugwala-II, supra and embargo being de hors Article 19 (6).
(iv) Manifest arbitrariness since the Amendment Act fails to recognize the blatant normative difference between a ‘game of skill’ and a ‘game of chance’, in gross derogation of Chamarbaugwala Jurisprudence of more than six decades.
(v) The impugned legislative measure is a result of excessive paternalism & populism. The State is imposing its own notion of morality on the free & rational citizens by clamping a blanket ban on online games of skill.This is constitutionally unsustainable.
ARGUMENTS BY THE RESPONDENT
(i) There was a Public Interest Litigation in seeking a direction for legislatively banning all forms of online gambling &online betting; a Division Bench of this Court directed the respondent-State to take a stand on the matter and accordingly, the Chief Secretary, Govt. of Karnataka had filed an affidavit to the effect that the State would come out with a legislation. The impugned Amendment Act has come on the Statute book pursuant to the assurance given to the Court.
(ii) In the preceding two decades or so, because of digital revolution, there has been a proliferation of online gaming platforms which engage in ‘betting & wagering’ unbound by time & place unlike traditional betting, and this has proved disastrous to the public interest in general and public order & public health in particular. The menace of cyber games having reached epic proportions, the police in the past three years or so, have registered about 28,000 cases, all over the State. Several persons have committed suicide and millions of families have been ruined. Therefore, the Amendment Act is made criminalizing wagering, betting or risking money on the unknown result of an event, be it a game of chance or a game of skill. The persons owning these premises or online platforms wherein such games are played are also liable to be punished. The State derives legislative power under Article 246 read with Entries 1, 2, 6 & 34 of State List as widely interpreted by the Apex Court.
(iii) Amendment Act introduces clarificatory provisions to the effect that the provisions relating to gaming apply to online gaming & platforms, as well. Apart from making the offences cognizable & non-bailable, it makes the punishment more stringent commensurating with the gravity of the offence. However, if persons merely play a game of chance or a game of skill without risking cash or kind, they do not fall in the net of penal provisions.
JUDGEMENT
Following a thorough hearing from each petitioner in the writ cases, the state government and the Hon’ble High Court of Karnataka issued a comprehensive ruling that granted each and every writ petition, which resulted in:
1. The Karnataka Police (Amendment Act 2021) was set down because it was decided that Sections 2, 3, 6, 8, and 9 were outside the bounds of the Indian Constitution.
2. The ruling does not exclude the enactment of new laws in India that regulate online gaming, particularly “Betting and Gambling,” in accordance with the Constitution.
3. In order to stop the respondents from meddling with online gambling enterprises’ operations, a writ of mandamus was issued.
The Amendment Act cannot be justified under the heading of “public order” because the Act’s provisions cannot be applied to isolated incidents of disorder or improper use of online gambling, regardless of how liberally they may be interpreted.
RATIONALE
The Amendment Act’s objective to safeguard public health is not adequately justified. The reply had argued that online game addiction had been classified as a public health danger by the World Health Organization (WHO). The state hasn’t established a commission to carry out its own empirical research on the negative effects of online gaming and the ensuing addiction, the court noted, so the claim that this falls under the state’s purview of “public health” is implausible. The state received criticism by the court for imposing its moral opinions on its citizens through the enactment of an excessively wide ban. The constitutional viability of this paternalistic attitude was addressed.
The arguments of the petitioners in relation to Article 19(1)(a) of the Constitution (right to freedom of speech and expression) were upheld by the court. The court also compared gaming to other modes of expressions and came to the conclusion that gaming involves psychological components as well as other skills. Court agreed that gaming is a mode of expression and one’s individual skill is on display when gaming.
Offering games of skill have been judicially held to be legitimate business activities and are protected under Article 19(1)(g) of the Constitution (to practise any profession, or to carry on any occupation, trade or business).
Therefore, the Amendment Act was violative of Article 14 of the Constitution (equality before law) since it was unjustifiably selective and clamped an absolute embargo on all games of skill defying the principle of proportionality. It is egregious that the state has drawn no distinction between a ‘game of skill’ and a ‘game of chance’ in the Amendment Act.
DEFECTS IN LAW THAT THE COURT ADDRESSED
The petitioners contended that Entry 34, List II, Schedule VII of the Indian Constitution did not grant the state assembly the authority to implement the amendment. The court agreed, pointing out that by incorporating skill games—which are customarily seen as a respectable kind of commercial activity—the amendment went beyond the bounds of legislative authority.
The Hon’ble High Court held that the amendment infringed upon the fundamental rights to freedom of speech and expression, as well as the right to practice any profession or carry on any occupation, trade or business. The court ruled that the amendment unnecessarily restricted the right to play games of skill, which is a component of speech and expression.
INFERENCE
The judgment emphasizes the judiciary’s responsibility to uphold the fundamental rights guaranteed by the Constitution. The court emphasized how crucial it is to protect the freedoms of speech and expression (as guaranteed by Article 19(1)(a)) and the right to engage in any kind of trade, company, or profession (as guaranteed by Article 19(1)(g)). Therefore, the enactment of such an amendment by the State legislature that infringed upon the people’s right must rightfully be struck down.
The established legal distinction between games of skill and games of chance was upheld by the court. This distinction is important because, in contrast to games of chance, which may be controlled by stricter regulation, games of skill have been recognized as lawful commercial activity that are protected by the constitution. The court rightly underlined that legislative actions had to be reasonable and shouldn’t impose blanket prohibitions without sufficient rationale. The court’s decision rightly noted that the amendment, which is viewed as an excessive authority, was disproportionate in that it failed to discriminate between games of skill and chance.