BENGALURU: The Karnataka government has proposed to amend the Karnataka Police Act, 1963 in the forthcoming legislature session to ban online betting and gambling.
If the Bill becomes an Act, it will curb the “Game of Chance” -- any game, contest or activity where the outcome is predominantly determined by luck, randomness or uncertainty and includes online gambling, betting and wagering activities.
It will also curb online betting in any form of wagering or staking of money, tokens, virtual currency or electronic funds on the outcome of a game, event or activity, conducted through the internet, mobile applications, or other digital platforms, where the outcome is predominantly determined by chance, as per the draft Bill.
But it exempts the ‘Game of Skill’ -- any game, contest or activity where the outcome is determined by the skill, knowledge, training or expertise of the participant, as recognised by judicial precedents.
“The Games of skill, as determined by the State Government or a designated authority, shall be exempt from the prohibition, subject to regulation and licensing,” it clarified.
Karnataka govt to set up Online Gaming & Betting Regulatory Authority
Any person or entity operating an unregistered platform or engaging in online betting will be punished with imprisonment for up to three years and a fine of up to Rs 1 lakh. Any person aiding, abetting or promoting illegal online betting, including through advertisements or endorsements, will be punished with imprisonment up to six months and fined up to Rs 10,000.
The government will constitute a Karnataka Online Gaming and Betting Regulatory Authority to oversee, regulate and enforce the Act. It will consist of a chairperson, appointed by the state government, with experience in law, public administration or technology.
Three members, including one expert in information technology, one in finance and one in social welfare, will be appointed.
The Authority will distinguish between games of skill and chance based on judicial precedents and industry standards. It will issue licences to operators of skill-based gaming platforms, monitor and investigate unregistered platforms and illegal betting activities, and conduct awareness campaigns to educate the public about risks of online betting.
Any person or entity seeking to operate a skill-based gaming platform in Karnataka should apply for a licence from the Authority.
Participants should be 18 years and above. Restrictions will be placed on predatory practices, like excessive advertising or luring users with unattainable prizes.
The government will empower the police, including the Cyber Crime Branch, to investigate and take strict action against illegal online betting platforms and operators.
Internet service providers, network service providers and search engines are not allowed to host or promote content that directly or indirectly supports illegal online betting.
The Authority will collaborate with the Department of Information Technology and Cyber Crime Branch to develop and deploy technology for blocking unregistered online betting platforms, including websites, mobile applications, and related digital services.
It will coordinate with the Reserve Bank of India, financial institutions, and payment gateways to monitor and prevent financial transactions linked to illegal online betting.
All licensed platforms should maintain transparent records of all financial transactions, including deposits, withdrawals and payouts, for a minimum of five years, and comply with anti-money laundering (AML) and counter-terrorism financing (CTF) guidelines as prescribed by the state and central government authorities.
Online betting should be reported to the Authority and the Financial Intelligence Unit-India (FIU-IND) within 48 hours.
The Authority will have the power to issue cease-and-desist orders to unregistered platforms and individuals involved in illegal betting, impose civil penalties, in addition to criminal penalties, up to Rs 5 lakh for repeated violations and conduct searches, seizures, and audits of premises, servers, and records of suspected illegal operators, subject to a warrant from a competent court.
Any individual or entity providing credible information leading to the identification and prosecution of illegal online betting operators will be protected from retaliation and may be eligible for a reward. The identity of whistleblowers will be kept confidential, except where required by a court of law.
Licensed platforms demonstrating exemplary compliance with this Act may be recognised by the Authority through public commendation or incentives, as prescribed by rules.