FIR filed against founders of dream 11 in Karnataka as it shuts their operations in Karnataka

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The Karnataka Police (Amendment) Act, 2021, which got the Governor’s assent on October 4, says the words “gaming means and includes online games, involving all forms of wagering or betting, including in the form of tokens valued in terms of money paid before or after issue of it, or electronic means and virtual currency, electronic transfer of funds in connection with any game of chance…”

With Dream11 suspending operations in Karnataka after its directors were booked under the amended Karnataka Police Act, which seeks to ban online gaming, it is likely that the modified law will be challenged in court soon. On Sunday, the online fantasy sports platform said “in order to allay our users’ concerns, we have decided to suspend operations in Karnataka,” adding that “this decision is without prejudice to our rights and contentions under law.”

Supreme Court lawyer and Federation of Indian Fantasy Sports (FIFS) adviser Gopal Jain Sunday said the Karnataka Police Amendment Act can be challenged with a writ petition in the Karnataka High Court as it is ultra vires — being contrary to Supreme Court judgments on Article 19 (1)(g) related to the right to business, and Article 14 because it is manifestly arbitrary.

"Following the recent media coverage, our Karnataka users have expressed deep concerns and anxiety on their safety and security. In order to allay our users' concerns, we have decided to suspend operations in Karnataka. This decision is without prejudice to our rights and contentions under law". Dream 11 said in a statement.

The company further said that it has been advised by the Federation of Indian Fantasy Sports (FIFS), which has shared an opinion from a former Supreme Court Judge, that the Karnataka Police (Amendment) Act 2021 does not apply to its member Fantasy Sports Operators.

Police records showed a case has been registered in India's tech capital Bengaluru, in Karnataka, following a complaint by a 42-year-old cab driver who reported it as being operational after a ban on online games involving betting came into force.

Dream11, which provides a fantasy gaming platform for various sports, last year became India's first gaming startup to be valued at over $1 billion. It has faced legal challenges in the past due to the similarities of fantasy gaming to gambling. The state law, which came into effect last week, bans online games involving betting and wagering and "any act or risking money, or otherwise on the unknown result of an event including on a game of skill".

Karnataka’s Home Minister Araga Jnanendra called the first case booked under the new law as a “big win” in the government’s fight against online gambling. The home minister further said, have blocked access to the games in Karnataka after the law was notified last week. The government, he said, has only banned games of chance, and not the games of skill. But one cannot allow betting and wagering even on games of skill. Jnanendra urged members of the public to inform the police if they came across any instances of violation of the law.