Dream11 suspends operations in Karnataka

Bengaluru, October 11: Online fantasy sports platform Dream11 has suspended operations in Karnataka as it battles allegations that it violated the state government's new online gaming law, which bans games of chance.

When the new law came into effect on October 5, other gaming companies such as Mobile Premier League, Paytm First Games, Games24X7 and others deactivated their platforms in Karnataka, but Dream11 continued to operate.

The Bengaluru Police then filed a first information report (FIR) against Dream11 co-founders Harsh Jain and Bhavit Sheth, based on complaint by Manjunatha, a cab driver, who alleged that the Mumbai firm broke the law by continuing to offer gaming services on its platform a week after the state government notified the new rules.

The police were preparing to issue a notice directing the founders to appear before them and to respond to the charges.

However, Dream11 continued to maintain that it is compliant with all the laws.

"However, following the recent media coverage, our Karnataka users have expressed deep concerns and anxiety on their safety and security," the company said in a statement.

"In order to allay our users' concerns, we have decided to suspend operations in Karnataka. This decision is without prejudice to our rights and contentions under law."

The move has come at a very time as the Indian Premier League (IPL) 2021 has reached its business end and the ICC T20 Cricket World Cup is starting soon.

As per reports these big events are crucial for the online gaming platforms to drive engagement and acquire new users in what's a competitive sector.

Karnataka's Home Minister Araga Jnanendra termed the first case filed under the new law a big win for the government. He said many online game operators have blocked access to their platforms in Karnataka since the law was notified last week.

He said while the government has only banned games of chance, not games of skill, "one cannot allow betting and wagering even on games of skill", said.

Karnataka's new law bans online games that are games of chance in nature. It makes operation, abetting or sheltering of online games involving exchange of money, betting and wagering cognizable and non-bailable offence.

(With inputs from Agencies)