A23 Challenges Online Gaming Ban in Karnataka High Court

India’s sweeping ban on online money-based games has come under its first legal challenge, with real-money gaming platform A23 moving the Karnataka High Court against the new law. The petition, filed on August 28, argues that the Promotion and Regulation of Online Gaming Act, 2025, which bans all online games involving monetary stakes, violates constitutional guarantees of equality, freedom of trade, and the right to carry out business. The court is scheduled to hear the matter on August 30.

The new law, passed by Parliament on August 21 and signed into effect the following day, criminalises both offering and promoting online money games. It prescribes penalties of up to three years in prison and fines of up to ₹1 crore for companies operating such platforms, as well as fines of ₹50 lakh and two years of imprisonment for advertising them. It also grants law enforcement sweeping powers to block websites, seize funds, and conduct searches without warrants. The move has sent shockwaves through India’s rapidly growing gaming industry, which had previously operated under judicial protections for games of skill such as rummy and fantasy sports.

In its petition, A23, owned by Head Digital Works, contended that the legislation ignores long-standing legal precedent that distinguishes skill-based games from gambling, effectively rendering legitimate businesses illegal. The company argued that the ban amounts to “state paternalism” and claimed it was enacted without adequate consultation with industry stakeholders. According to its filing, the sudden prohibition threatens hundreds of jobs, including over 600 within its own operations, and undermines a sector that had attracted significant foreign and domestic investment in recent years.

India’s online gaming sector has grown rapidly over the past decade, with fantasy sports and rummy platforms reporting millions of active users. Several high court and Supreme Court rulings had upheld that games of skill fall under the protection of Article 19(1)(g) of the Constitution, which guarantees the right to practise a profession or trade. Industry leaders say the new law disregards this judicial distinction by classifying all real-money games—regardless of skill level—under a single category of banned activities.

The government has defended the legislation as a necessary step to curb gaming addiction, financial losses, and related social harms, citing a rise in cases of gambling-related debt and suicides. While some companies, including market leader Dream11, have opted to comply with the ban and shift their business models, A23’s legal challenge signals the start of what could be a protracted battle over the future of online gaming in India.