A major shift is underway in India’s southern tech hub. The state of Karnataka has introduced a legislative proposal that aims to reshape the online gambling landscape by banning games of chance played for money or digital tokens, while formally legalizing and licensing skill-based platforms through a new regulatory body.
The proposed Karnataka Police (Amendment) Bill – 2025 lays the foundation for a dedicated oversight mechanism: the Karnataka Online Gaming and Betting Regulatory Authority (KOGBRA). This body would issue licenses, oversee compliance, audit technical systems, and enforce penalties for violations.
Under the bill, only platforms offering games of skill—like fantasy sports, poker, or rummy under certain legal interpretations—would be eligible for licensing. All chance-based online games involving stakes, regardless of whether real currency or virtual assets are used, would be banned outright.
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The move comes in response to a 2021 legal defeat, when Karnataka’s blanket ban on online games was struck down by the High Court for failing to distinguish between skill and chance. This time, the government has adjusted its playbook—offering a clear legal and operational framework for platform operators and regulators alike.
Operators who receive licenses under the new system must comply with strict data retention requirements, implement anti-money laundering protocols, ensure transparency in payouts, and report suspicious behavior within 48 hours. Violators—including those who operate without a license or advertise prohibited games—face prison terms of up to three years and fines reaching ₹1 lakh.
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Reactions have been mixed. Some in the gaming sector welcome the move as a step toward clarity and accountability, especially after years of regulatory limbo. Others raise concerns about limited industry consultation and the need for a uniform federal policy to prevent patchwork rules across India’s 28 states.
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What’s certain is that Karnataka has become a test case for India’s evolving stance on digital gambling. With an estimated 400 million gamers nationwide and rising investor interest, the implications go beyond state lines. If successful, Karnataka’s model could influence national policy and offer a replicable blueprint for other jurisdictions navigating the thin line between regulation and prohibition.
