The Union government has asserted to the Karnataka High Court that the judiciary cannot impede the implementation of the new Promotion and Regulation of Online Gaming Act, 2025. The Centre stressed that once a law receives Presidential approval, its notification is a "constitutional function" that is beyond judicial intervention.
Solicitor General of India, Tushar Mehta, defended the legislation before the Karnataka High Court, stating that the Act's passage through Parliament and subsequent approval by the President leave no room for preventing its enforcement simply because "one particular individual" is aggrieved. Mehta's remarks came in response to a petition filed by Head Digital Works, the parent company of A23, which offers online rummy and poker games, challenging the new Act.
The Karnataka High Court has directed the Union government to respond by September 8 to the plea challenging the Online Gaming Act, 2025. Justice B.M. Shyam Prasad is presiding over the case. Senior Advocate C. Aryama Sundaram, representing Head Digital Works, argued that the law violates several constitutional rights, including the right to practice trade and business. The petition emphasizes that the Supreme Court has consistently recognized games of skill as legitimate businesses, even when played for stakes, distinguishing them from gambling. The company contends that the Act is "manifestly arbitrary" because it equates law-abiding domestic operators with illegal offshore betting platforms.
Sundaram urged the court to ensure that the Act is not notified until the matter is fully heard and requested that the government provide at least one week's notice before notifying the law so that affected stakeholders could seek appropriate legal remedies. The petitioner also argued that the Act was passed without any consultation or deliberation and is contrary to the government's policy of actively promoting the online skill gaming sector.
The government, however, maintained that once Presidential assent is received, the law must be notified, leaving little room for delay. Mehta also underlined that the case raises a broader question regarding jurisdiction—whether the Centre or individual states hold regulatory authority over the real-money online gaming industry. He stated that this was the first time the court would be examining the competence of this legislation, which has transborder implication. When asked if the center planned to notify the Act immediately, the SG submitted that he would have to take instructions on the same.
The Promotion and Regulation of Online Gaming Act, 2025, is the first central legislation to impose a nationwide prohibition on online games played for stakes. The Act bans all online Real Money Games (RMGs), be it games of skill, chance, or both. The main contention of the petitioner is that the PROG Act is contrary to the settled principle of law laid down by the Supreme Court many decades ago that games of skill, involving risking of money or otherwise, are a 'not things outside commerce' but a legitimate business activity protected under Article 19(1)(g) of the Constitution of India. The Act also treats violations of the provisions as a cognizable and non-bailable criminal offense.
The online gaming industry contributes significantly to the Indian economy, generating between ₹6,500–₹6,800 crore in direct taxes and nearly ₹75,000 crore in indirect taxes annually, while supporting over two lakh jobs. Head Digital Works, which runs A23, stated that it employs 606 people directly and contributes substantially to government revenues and has paid over ₹1,643 crore in GST and nearly ₹96 crore in service tax (pre-GST) since its inception. In FY 2024–25 alone, it deposited ₹687 crore in GST.
