Karnataka Government to Regulate Online Betting and Gaming

The Karnataka Government has set up a committee to draft legislation aimed at regulating online gambling and betting platforms. The goal is to curb fraudulent practices and promote a transparent, legal gaming environment.

Understanding Gambling

Gambling typically involves three essential elements:

1. Consideration: Something of value is wagered.
2. Chance: The outcome is influenced by luck.
3. Reward: A prize or monetary gain is involved.

Why Regulation Is Needed

1. Improved Monitoring and Enforcement
   A complete ban on betting has not been effective. Legalising and regulating the sector can lead to better enforcement mechanisms. (Law Commission’s 276th Report)
2. Curbing Match-Fixing in Sports
   Bringing sports betting under regulation could reduce unethical practices like match-fixing by players. (Justice Lodha Committee)
3. Preventing Black Money
   According to FICCI, legalised betting could generate ₹12,000–₹19,000 crore in revenue and reduce the underground economy.

Challenges in Regulating Online Gambling

1. Games of Skill vs. Games of Chance
   1. Sports betting is argued to be a game of skill, similar to horse racing, and thus should be permitted.
   2. In RMD Chamarbaugawala v. Union of India (1957), the Supreme Court held that activities requiring substantial skill are commercial in nature and protected under Article 19(1)(g) of the Constitution.
2. Federal Structure and State Autonomy: Gambling is a State subject under the Constitution. If the Centre tries to regulate it, it could lead to a violation of the federal principle of power distribution.
3. Tourism Considerations: While most states ban gambling for residents, some like Goa allow it as a tourist attraction, contributing to their local economy.

Current Regulatory Framework

1. IT Rules 2021: These rules introduced a co-regulatory system, where self-regulatory bodies—recognized by the Ministry of Electronics and Information Technology (MeitY)—determine if an online real-money game is fit for public access.
2. Amendment Rules 2023
   1. Mandate registration and verification of online games.
   2. Ensure transparency in privacy policies and user agreements.
3. State-Specific Laws
   1. Assam: Assam Gaming and Betting Act, 1970
   2. Goa: Goa, Daman and Diu Public Gambling Act, 1976
      These laws differ across states, reflecting varied approaches based on regional needs and socio-economic factors.

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