Dream11 suspends operations in Karnataka after FIR under new law; users miss IPL playoffs [details]

Fantasy sports company Dream11 on Sunday suspended its operations in Karnataka, banning users from the state from participating in any paid contests on the platform. The decision comes in compliance with the new online gambling law that came into effect on October 5.

Karnataka users haven't been able to join any contest, instead, they receive an error message stating users residing or having a bank account in the state would not be allowed to participate in cash contest on Dream11.

To that extent, Dream11 updated its terms and services to include Karnataka among the states where users are prohibited from participating in paid contests. it cites the laws of the state that bar persons from participating in games of skill where participants are required to pay to enter.

"The Karnataka Police Act recently amended its gaming law to prohibit online gambling, betting and wagering. We have been advised by the Federation of Indian Fantasy Sports (FIFS), who have shared an opinion from a former Supreme Court Judge, stating that the Karnataka Police (Amendment) Act 2021 does not apply to its member Fantasy Sports Operators. This is because the FIFS format of Fantasy Sports has been upheld by the hon'ble Courts of India as not amounting to gambling, betting or wagering." a company spokesperson was quoted as saying.

According to consulting firm KPMG, the IPL Fantasy League itself is worth $1 billion. With the upcoming T20 World Cup, the two-month period (September 19 to November 14, 2021) is the peak of the fantasy cricket season of 2021. The suspension strikes a huge blow to Fantasy cricket lovers in Karnataka, as the state is among the two top fantasy sports markets in India along with Maharashtra.

FIR against Dream11 core team

Annapoorneshwarinagar police in Bengaluru had registered an FIR against the founder and Directors of 'Dream 11' online game app, police sources said on Friday. Bhavit Sheth and Harsh Jain, the Founders and Directors of Sporta Technologies Private Limited which promotes the 'Dream 11' gaming app, have been booked as accused number one and two. The police have initiated action based on the complaint by one Manjunath, a resident of Nagarbhavi in Bengaluru filed on Thursday.

The complainant said the Karnataka government made amendments to the Karnataka Police Act, 1963, prohibiting the online games of chance and skill where money is risked. He had searched the Google Play Store to know how many online games are withdrawn. Many companies have blocked their mobile applications except "Dream 11."

Despite this, they have continued betting on online games by promoting their online mobile gaming application called 'Dream 11'. The people are still putting and risking their money by creating their own fantasy cricket team and losing huge amounts of money giving a chance to the accused to earn unlawfully, the complaint said.

New law prohibits betting, gambling

The Bharatiya Janata Party (BJP) government has notified the Karnataka Police (Amendment) Act, 2021, banning all formats of online games involving wagering, betting and gambling of all nature and forms in the state.

Under the new law, online gaming is considered a non-bailable offence with a fine of Rs one lakh and imprisonment up to three years. Along with banning games of skills, the Karnataka government has categorised online games using electronic means and virtual currency, electronic transfer of funds in connection with any game as gambling.

The new legislation passed in the Monsoon session by both the Houses of the Karnataka Assembly has been approved by the Governor. Mobile Premier League (MPL) was one of the first companies to stall its operations in Karnataka followed by Paytm First Games.

(Additional agency inputs included)