Gaming apps began blocking access to users in the Indian state of Karnataka on Wednesday following a controversial ban on online gaming.
Sequoia Capital-funded Mobile Premier League (MPL) was among the first gaming startups to cut off access to users in the state after the new law came into effect late on Tuesday.
The legislation bans online games involving betting and wagering, and “any act of risking money, or otherwise on the unknown result of an event including on a game of skill.”
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The latest ban has intensified concerns that growing state regulations could hit the young but booming gaming sector in India, where foreign investors have pumped in millions of dollars in recent months.
On Wednesday morning, MPL’s gaming app showed messages to users in Karnataka that said: “Sorry! The law in your state does not permit you to play Fantasy sports,” “Fantasy games are locked” and “cash games are locked.”
The gaming app offers fantasy cricket and football games and allows real-money wagering on them.
Dream11, one of India’s most popular gaming apps backed by Tiger Global, was still operational, but Paytm First Games was not.
Karnataka, home to some of the world’s biggest tech companies and India’s tech capital Bengaluru, is the latest Indian state that has banned such online games after Telangana and Andhra Pradesh. Tamil Nadu had also imposed such bans, but its bill was struck down by its high court.
Industry’s Legal Challenge
An industry source said earlier that these states were important for the gaming business and account for roughly 20% of the total business for companies.
Roland Landers, the chief executive of the All India Gaming Federation, said “the industry will challenge this in court and seek legal recourse.”
Two other industry sources said on Wednesday that gamers and some companies were planning to file court challenges against the new Karnataka law.
The law imposes hefty fines and prison terms on offenders and has been implemented amid growing concerns that online gaming platforms, like gambling, are addictive and can cause financial harm.
- Reuters with additional editing by Sean O’Meara
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