Digital News Guru Karnataka Desk:
A23’s Challenge: Arguments and Relief Sought
Head Digital Works, the parent company of A23, became the first to file a legal petition in the Karnataka High Court challenging the law. The petition is slated for a hearing on August 30, 2025 before Justice B. M. Shyam Prasad.
Key points raised in A23’s petition include:
- Criminalization of Skill Games: A23 argues the ban criminalizes skill-based games like rummy and poker, which courts—including the Supreme Court—have previously recognized as legitimate business rather than gambling.
- Violation of Constitutional Rights: The petition asserts the law is arbitrary, violates Articles 14, 19, and 21, and impairs the right to conduct business. A23 specifically highlights the excessive nature of penalties, broad enforcement powers, and lack of public consultation in drafting the law.
- Economic Damage: The company warned the law threatens hundreds of thousands of jobs, foreign investments, and the sector’s future. A23 alone employs 606 people and is backed by prominent investors.
- “State Paternalism”: A23 labeled the legislation a “product of state paternalism”, reflecting its view that the law overreaches in regulating legitimate business activities.
A23, an Indian gaming company, has launched the first legal challenge against the government’s ban on online money-based gaming—a significant development following the introduction of the new “Promotion and Regulation of Online Gaming Act, 2025.”
Background: New Law Bans Real-Money Gaming
The Promotion and Regulation of Online Gaming Act, 2025 was introduced and fast-tracked through Parliament between August 20–21 and received presidential assent on August 22. It enacts a blanket prohibition on real-money online games—be it skill-based or chance-based—while aiming to regulate permitted activities like e-sports and casual gaming under a new licensing framework.
Under the new act, offering, promoting, or advertising real-money games is criminalized. Penalties include up to three years imprisonment and Rs 1 crore fine for providing gaming services, and up to two years imprisonment with Rs 50 lakh fine for advertisements.
Industry Reactions
While A23 has taken a stand, most major platforms—including Dream11, MPL, PokerBaazi, WinZO, and Zupee—have opted not to challenge the law legally. Many have suspended real-money operations or diverted to alternative business models.
Dream11, for instance, saw 95% of its revenues vanish overnight, while still choosing not to pursue legal action.
Government’s Position
The government justifies the ban, citing rising addiction, financial harm, suicides, and risks of misuse—such as fraud and even terror financing—associated with money-based online gaming platforms. The act aims to safeguard public interest by altering the regulatory landscape, particularly for vulnerable groups.
At the same time, the IT Secretary emphasized that the ban targets only money games, and that the broader gaming ecosystem—including e-sports and casual social gaming—remains untouched and supported.
What’s at Stake
| Stakeholder | Concern/Course of Action |
| A23 (Head Digital Works) | Legal pushback, potential constitutional challenge and revisiting the distinction between skill-based vs chance-based games. |
| Other Platforms | Business disruption; most choose compliance over litigation. |
| Industry | Potential job losses, investor withdrawal, and dampened innovation. |
| Government | Upholding social welfare but risking backlash over blanket ban. |
| Consumers/Players | Confusion, disrupted access, and wallet fund withdrawal concerns. |
In Summary
A23’s legal challenge marks the first test case to gauge the constitutionality of the new Promotion and Regulation of Online Gaming Act, 2025. Centered on protecting skill-based gaming as legitimate commerce, the lawsuit could determine whether India’s regulatory approach balances public good with fair market principles—or imposes draconian restrictions without due consideration.
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