By Vidushpat Singhania
The Karnataka Government has recently moved to legalise online betting on horse racing through a proposed amendment to the Karnataka Race Courses Licensing Act, 1952. This proposed bill will tentatively be introduced in the winter session in December 2025. Through it the Government of Karnataka has indicated that it plans to enable licensed platforms to offer online wagering on horse races.
It is indicated that the proposed bill aims to enable online wagering on skill-based games, which comes in direct conflict with the Promotion and Regulation of Online Gaming Act, 2025 (“PROGA”/ “Act”) enacted by the Union Government in August 2025. While the PROGA isn’t enforced yet, it places a blanket ban on all real-money online games throughout India, irrespective of whether they are skill or chance-based.
The subject of “Betting and gambling” falls under Entry 34 of List II and has traditionally been under the legislative purview of individual states. In the case of Dr K.R. Lakshmanan v. State of Tamil Nadu, the Hon’ble Supreme Court of India recognised horse racing as a game of skill and specifically held that wagering on the same would not amount to betting or gambling.
Considering this exception, various states such as Tamil Nadu, Maharashtra, Karnataka, Delhi, Telangana, Uttar Pradesh and West Bengal have permitted betting on horse racing in regulated settings. Through the proposed bill, Karnataka seeks to provide regulatory certainty.
The recent promulgation of the PROGA and its blanket ban on online real money gaming creates a debate over the constitutional division of powers. PROGA, through Section 18, overrides any conflicting laws, clearly stating therein “in case of any inconsistency of this Act with any other Act, the provisions of this Act shall, to the extent of such inconsistency, have overriding effect”. However, it is reiterated that currently, the PROGA hasn’t been enforced and is undergoing a constitutional challenge before the Hon’ble Supreme Court in Head Digital Works Private Limited and Anr. v. Union of India.
Irrespective of the ongoing case before the Hon’ble Supreme Court of India, Karnataka’s move raises a significant question that has been at the heart of discussions – whether regulation should be considered before the complete prohibition of online money gaming in India. Prohibition of any activity usually pushes the prohibited activity underground, fueling illegal and dubious markets whilst encouraging existing users to seek access through other available means, in this case, potentially using VPNs, offshore websites, and other options.
Regulation in this context would require governments to enforce licensing, age restrictions, responsible gaming practices, and anti-money laundering controls. Through regulation, States can harness the economic potential of online gaming while safeguarding players’ and the public interest. That the online gaming market forms a large source of revenue from taxation as well as for employment, foreign investment, and economic development is another added advantage.
Various jurisdictions across the world have taken up gaming regulation, as opposed to complete prohibition, as the way forward. Licensing regimes, robust regulations and compliance requirements, responsible gaming measures and more have enabled countries like the United Kingdom, Australia, the United States, etc. to regulate their online money gaming sectors. Karnataka’s decision to introduce this bill is in direct contrast to the PROGA whose central enforcement is currently in abeyance.
Regardless of the outcome of the constitutional challenge, Karnataka’s move highlights a critical debate on whether comprehensive regulation can better address the complexities of online gaming compared to outright prohibition.
Regulation not only safeguards players and curbs illegal markets but also opens avenues for economic growth. Ideally, a balanced approach that acknowledges the division of power and fosters a sustainable, transparent gaming ecosystem should be preferred.
(The author is Managing Partner at Krida Legal)
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