Online Gaming Ban Faces First Legal Test as Firm Moves Karnataka HC, Hearing on Aug 30

The newly enacted central law banning all forms of online money gaming is facing its first major legal challenge, with the Karnataka High Court set to hear a petition filed by leading online gaming company A23 on August 30. The company is challenging the constitutional validity of the “Promotion and Regulation of Online Gaming Act, 2025,” which received presidential assent last week.

The petition was mentioned for an urgent hearing on Wednesday by a team of senior advocates, setting the stage for a high-stakes legal battle that could determine the future of the multi-billion dollar online gaming industry in India. The new law, which passed rapidly through both houses of Parliament, effectively outlaws any online game involving monetary stakes, erasing the long-standing legal distinction between games of skill and games of chance.

This blanket prohibition is at the heart of the legal challenge. The gaming industry has long argued that games of skill, such as rummy and fantasy sports, are protected under the Constitution as legitimate business activities and cannot be equated with gambling. The new central law directly confronts this position, bringing all forms of real-money gaming under a single prohibitive framework.

The choice of the Karnataka High Court for this first challenge is significant. In 2022, the same court struck down a similar state-level ban, ruling that a blanket prohibition on games of skill was unconstitutional. The industry is hopeful that this precedent will bolster their arguments against the new, more sweeping central legislation.

The new Act imposes severe penalties, including imprisonment of up to three years and fines of up to ₹1 crore for operators of online money games. The hearing on August 30 will be closely watched by the entire gaming industry, as its outcome could set a crucial precedent for other potential legal challenges across the country.