A major online gaming company, A23, has initiated the first legal fight against the Indian government’s recent prohibition on online games involving monetary stakes. Court documents indicate that A23 has formally challenged the new legislation in the Karnataka High Court, marking a significant escalation in the conflict between the government and the rapidly growing digital gaming sector.

The new law has cast a shadow over an industry that had attracted substantial investment from prominent venture capital groups, including Tiger Global and Peak XV Partners, and was previously on track to reach a valuation of $3.6 billion in India by 2029.

The Core Dispute: Skill vs. Gambling

The contentious law effectively bans online games played for money, a move the government justifies by citing concerns over addiction and other “social evils.”

However, the online gaming industry argues that many of its offerings, such as online rummy and poker, are games of skill, not gambling, and should therefore be treated differently under the law. A23, which offers both rummy and poker, contends in its court filing that the law is a “product of state paternalism” and “criminalises the legitimate business of playing online games of skill.” The company is seeking to have the ban declared unconstitutional in its application to skill-based games.

Industry Repercussions

The immediate impact of the ban has been severe. Popular platforms like Dream11 and Mobile Premier League (MPL) have already suspended their money-based contests. The CEO of Dream11 acknowledged the devastating effect, stating that the ban led to the overnight loss of approximately 95% of their group’s revenue.

Despite the financial blow, not all major players are pursuing legal action. Both Dream11 and MPL have chosen not to challenge the new regulation. An internal source reported that MPL has even advised industry associations to shift their focus toward free-to-play business models in the wake of the government’s action.