The Karnataka High Court struck down a state government law that banned online gaming, according to Business Standard1. The state government had notified the law banning betting and wagering in online games in October 2021, after Governor Thawar Chand Gehlot gave his assent1. A division bench struck down several provisions of the Karnataka Police (Amendment) Act, 2021, which had banned real money based online gaming in the state1.
The ruling had a direct follow-on. An FIR filed in 2021 against Dream11 co-founders Harsh Jain and Bhavit Sheth in Bengaluru was quashed by the Karnataka High Court, on the grounds that nothing remained in the FIR after the division bench struck down the provisions1. Business Standard reported the quashing in March 20221.
"The FIR registered by Karnataka Police against Dream11 founders was quashed in today"
The same report quoted Senior Advocate Gopal Jain saying several High Courts are gradually but steadily recognizing the distinction between fantasy sports and games of chance, gambling, betting and wagering1. Salman Waris, a partner at Delhi-based law firm TechLegis, called the development a positive step and a temporary relief, adding that if the Karnataka government were to challenge the decision or make specific legislation on fantasy gaming, the nascent industry could face a major challenge1.
The ruling did not settle the wider picture. Business Standard noted that the Tamil Nadu government had passed a law to ban online games such as rummy, poker and other skill-based games involving betting and money prizes, but it was revoked in August 2021, and that other states which clamped down on the industry include Telangana, Andhra Pradesh, Kerala, Assam and Odisha1. Dream Sports, the parent firm of Dream11, raised $840 million at a valuation of $8 billion in November, led by Falcon Edge, DST Global, D1 Capital, Redbird Capital and Tiger Global, and had raised $350 million at a valuation of $2.3 billion in September 20211.
Later reporting describes the Karnataka outcome as superseded. Gamble Press states that the Promotion and Regulation of Online Gaming Rules, 2026 came into force on 1 May 2026, banning online money games nationwide, defined as any game where a player deposits or stakes cash with the expectation of winning more back2. It states that the national ban overrides state rules, that Karnataka's 2021 ban was struck down by the High Court as unconstitutional, and that a state court striking down a state law cannot stop a later national one2. It adds that free-to-play and social games with no cash stake or payout are not affected, and that licensed land-based casinos in Goa and Sikkim, state-run lotteries in thirteen states, and in-person betting at licensed turf clubs on race day continue under separate laws2.
What it means for players
For players in Karnataka, the 2022 ruling removed the state-level prohibition on real money online gaming that had been notified in October 2021, and ended the police case against the Dream11 founders1. That position has since been overtaken: under the account in2, online money games are banned nationwide from 1 May 2026, and the earlier state-level skill-game rulings, including Karnataka's, no longer preserve an exception. Free-to-play and social games without a cash stake or payout are described as unaffected2. Land-based casinos, state lotteries and on-course racing betting are described as continuing under their own rules2.
What happens next
Business Standard reported that the Karnataka government could challenge the division bench order or bring specific legislation on fantasy gaming, which the quoted lawyer said could pose a major challenge to the industry1. No further Karnataka action is reported in these sources.
