A group of prominent online gaming companies are likely to file a constitutional challenge in the Karnataka High Court against India’s sweeping ban on real-money gaming, setting up a critical legal battle that could reshape the country’s rapidly growing digital entertainment sector.
Junglee Games, Zupee, Ace23 and some others are set to file a petition before the Karnataka High Court on Thursday, according to people familiar with the matter. The legal challenge comes in response to India’s Promotion and Regulation of Online Gaming Act, 2025, which effectively prohibits all online real-money gaming activities.
Notably, industry giants Dream Sports (maker of Dream11) and Gameskraft have refrained from legal proceedings.
The constitutional challenge centers on several key arguments that could determine the future of India’s online gaming industry, which was valued at over $3 billion before the regulatory crackdown.
At its core, the legal challenge invokes Article 19(1)(g) of the Indian Constitution, which guarantees citizens the fundamental right to practice any profession or carry on any occupation, trade or business. The petitioners argue that the blanket ban on real-money gaming violates this constitutional protection by completely prohibiting a legitimate business activity rather than regulating it.
“The fundamental right to carry on a business under Article 19(1)(g) is gravely infringed,” said Kanupriya Bhargava, partner at IRIS Legal, noting that while the government can impose reasonable restrictions on business activities, an outright prohibition exceeds constitutional limits.
Industry insiders say that less restrictive regulatory measures—such as KYC requirements, spending limits, and consumer protections—could address government concerns without eliminating the industry entirely.
Federal vs. State Powers
At the heart of the legal dispute is a fundamental question about India’s federal structure: whether the central government has the authority to ban activities traditionally regulated by individual states. The Act applies a blanket prohibition to both skill-based and chance-based games, though these fall under different constitutional jurisdictions—games of chance are regulated by states while games of skill fall under central authority.
“The Act conflates ‘game of chance’ with ‘game of skill’ under one umbrella, banning all real money games equally,” said Ms. Bhargava. “However, games of skill fall under the Central Government’s domain for regulation, while games of chance remain a State subject.”
The petitioners argue that the central government is relying on IT provisions under the Union List to justify the law, but assert that any central takeover of state subjects can only occur under Article 249 in public interest—and such measures must be temporary and require state ratification.
Legal experts argue that the Centre cannot rely on general public health or public order grounds to override states’ rights under India’s federal structure.
The legislation prescribes penalties of up to three years imprisonment and fines reaching one crore rupees, making certain violations cognizable and non-bailable, effectively placing gaming violations at the same level as national security laws. Bhargava argues these provisions are disproportionate and lack proper judicial oversight mechanisms.
The petitioners will also argue that regulation, rather than an outright ban, would be a more proportionate response. The argument highlights inconsistencies in the government’s approach, noting that sectors like digital finance—which experience higher fraud rates than gaming—continue to operate under regulatory frameworks rather than blanket prohibitions.
Critics also point to alleged discriminatory treatment between online and offline gaming. The law targets only online real-money games while physical gambling establishments in states like Goa and Sikkim continue to operate legally, raising questions about equal treatment under Article 14 of the Constitution.
The government is expected to defend the law on public health grounds, arguing that online gaming poses unique risks of addiction and financial harm that justify federal intervention. Officials may contend that users can continue playing games without monetary stakes, thus preserving the essential activity while eliminating perceived harms.
Tussle between State and Centre
Adding complexity to the legal landscape, Karnataka and Tamil Nadu state governments are preparing their own challenge to the Supreme Court, arguing that the central law infringes on their constitutional right to regulate gaming within their jurisdictions. This creates an unusual situation where gaming companies are challenging the law in Karnataka’s High Court while the state itself plans to contest it at the apex court—potentially complicating any interim relief decisions.
Both the Karnataka and Madras High Courts have previously upheld that skill-based games cannot be prohibited outright, affirming constitutional protections under Article 19(1)(g), which guarantees the right to practice any profession or carry on any trade or business.
