Karnataka High Court Denies Stay on Controversial Online Gaming Ban Amid A23 Legal Challenge, ETLegalWorld

No stay to A23’s petition A23’s challenge to India’s nascent online gaming ban saw no immediate relief in its first hearing before the Karnataka High Court. The court declined to grant a stay on the contentious Promotion and Regulation of Online Gaming Act, 2025, which is yet to be notified, setting the stage for further legal engagement.

Respondents were directed to file their responses and complete pleadings on the interim application for stay by September 8, with the matter slated for a fresh hearing that day.

Senior Advocate Aryama Sundaram, representing A23, pressed for narrow interim relief—either a direction that the law not be notified until arguments conclude, or at least a week’s prior notice before notification. He argued that sudden enforcement would shutter a long-standing industry overnight, risking thousands of jobs and disrupting business continuity. Though styled as a measure for “promotion and regulation,” he said, the Act in practice prohibits skill-based money games. He also invoked earlier online-gaming rulings and cited the Supreme Court’s Indian Hotels precedent, which held that fresh legislation in a different guise could merit interim protection.

Solicitor General Tushar Mehta countered on behalf of the Union that the law raised a first-of-its-kind constitutional issue: Parliament’s power to legislate on gaming involving money and cross-border play. He argued notification of a law is a legislative function courts should not restrain, and resisted offering prior notice without instructions. Mehta also pointed out that A23 had earlier challenged state gaming laws on competence grounds—arguing states lacked power to legislate—and now claimed Parliament itself lacked power, underscoring the need for a full hearing.

The petition argues that the law infringes on constitutional rights, including the freedom to conduct business and free speech, while disproportionately targeting skill-based gaming ventures. A23 contends the legislation could devastate a thriving industry and drive players toward unregulated offshore operators. It specifically challenges the act’s criminal penalties and advertising restrictions as excessive.

This case represents a pivotal moment in the regulatory landscape for India’s online gaming sector. The court’s upcoming review will focus on balancing government regulation goals with safeguarding industry growth and individual rights, a matter poised to shape the future of digital gaming in the country.

As the legal battle unfolds, industry stakeholders are keenly watching the Karnataka HC’s deliberations for indications on the government’s approach to emerging digital markets.

• Published On Aug 30, 2025 at 12:18 PM IST

Join the community of 2M+ industry professionals.

Subscribe to Newsletter to get latest insights & analysis in your inbox.

All about ETLegalWorld industry right on your smartphone!

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}