Online gaming ban faces first legal test as firm moves Karnataka HC, hearing on Aug 30

India’s online gaming sector has been jolted by sweeping new legislation that bans money-based games, forcing platforms to shut down operations overnight. A23, one of the country’s largest skill-based gaming firms, has now moved the Karnataka High Court, challenging the law, making it the first legal test of the government’s controversial move. The case will be heard on August 30, after the petition was mentioned for urgent listing on Wednesday by Senior Advocates C Aryama Sundaram and Dhyan Chinnappa.

The new law

The Promotion and Regulation of Online Gaming Act, 2025, received President Droupadi Murmu’s assent on August 22, just days after being cleared by Parliament. The legislation makes it illegal to offer any form of online money game—regardless of whether it is a game of chance or skill. This blanket ban has rattled an industry that has seen rapid growth in recent years, with estimates placing its user base in the hundreds of millions.

Following the law’s passage, major platforms such as Dream11, My11Circle, WinZO, Zupee, and Nazara Technologies-backed PokerBaazi suspended their real-money offerings, effectively shutting down their primary revenue streams.

A23’s challenge

In its petition before the Karnataka High Court, A23, which operates popular rummy and poker platforms, argued that the law “criminalises the legitimate business of playing online games of skill, which would result in the closure of various gaming companies overnight.” News agency Reuters, citing the court filing, reported that A23 also described the legislation as a “product of state paternalism” and asked that it be declared unconstitutional when applied to skill-based games.

A23.com, which claims to have over 70 million registered players, has positioned itself as a leading platform in India’s rapidly expanding online gaming market. Its plea could set a precedent for how courts balance regulatory authority with the industry’s claim of legitimacy under the Constitution.

The Ministry of Electronics and Information Technology (MeitY) has so far declined to comment on the petition.

Industry divided

Interestingly, not all companies are challenging the new law. Gameskraft, another major real-money gaming operator, issued a statement saying it has no intention of pursuing legal action. “We fully respect the legislative process and remain committed to operating within the framework of the law,” a company spokesperson said.

Gameskraft confirmed that it has paused its “Add Cash” feature and suspended gameplay services on its rummy apps, including RummyCulture, effective August 22. The company added that it is focusing on “constructive dialogue with policymakers, responsible innovation, and regulatory alignment.”

Similarly, Dream Sports co-founder and CEO Harsh Jain made it clear that his company, which operates Dream11, will not oppose the ban. “The government has made it clear that they don’t want this right now. I don’t want to fight with the government on something they don’t want,” Jain said in an interview with Moneycontrol. He acknowledged that 95% of Dream11’s revenues and all of its profits vanished overnight, but emphasized that the company would not resort to layoffs.

Industry associations including the All India Gaming Federation (AIGF), E-Gaming Federation (EGF), and the Federation of Indian Fantasy Sports (FIFS) have written to Home Minister Amit Shah, highlighting that the sector commands an enterprise valuation of nearly Rs 2 lakh crore and generates annual revenues exceeding Rs 31,000 crore. The bodies have urged the government to reconsider the blanket prohibition on skill-based money games, cautioning that such a move could lead to significant job losses and financial disruption for what has been one of India’s fastest-growing sunrise industries.