Head Digital Works, the company behind popular gaming platform A23, has petitioned the High Court of Karnataka at Bengaluru seeking an immediate stay on the operation of India’s Promotion and Regulation of Online Gaming Act, 2025, alleging the sweeping legislation unconstitutionally targets skill-based gaming platforms, as per court documents reviewed by ET Legal.

The news was originally broken by ET Legal, following a scoop last evening on a possible filing today.

Beyond the stay, the company requests the court declare Sections 2(1)(g), 5, 6, 7, and 9 of the Act unconstitutional and strike them down “to the extent they apply to online games of skill like rummy and poker.” The petition also seeks constitutional safeguards for enforcement provisions under Sections 14, 15, and 16 to align them with due process protections.

The company alleges the sweeping legislation unconstitutionally targets skill-based gaming platforms, and if enforced, would devastate a legitimate industry employing hundreds of thousands.

A23’s filing levels wide-ranging allegations against the new law. The petition claims the Act reverses government policy without justification, violates constitutional protections for free speech, equality, and the right to carry on business, imposes “excessive and disproportionate” criminal penalties, and grants sweeping powers to the executive. It warns of economic destruction, an exodus of players to illegal offshore operators, and the undermining of India’s own $5 trillion economic ambitions.

Government’s Contradictory Stance

The petition alleges the government has reversed course on the gaming industry without justification. According to the filing, the Act’s Statement of Objects and Reasons acknowledges online gaming as “a form of digital entertainment and competitive participation” that contributes to “innovation, employment generation and export earnings.” Yet the petition notes it simultaneously condemns online money games—the sector’s largest component—as having a “deleterious and negative impact” on “individuals, families, society and the nation.”The petition contends the legislation attempts to justify sweeping restrictions by linking online money gaming to “unlawful activities including financial fraud, money-laundering, tax evasion, and financing of terrorism,” invoking national security, public order, and state integrity as justifications.

Challenge to legislative authority

At the heart of the legal challenge lies a fundamental question of legislative authority. The petition alleges that “the Parliament could not have assumed legislative competence under the Entry 31 or 36 of List I,” contending that online games of skill fall under “sports, entertainments and amusements”—a state subject under Entry 33 of List II.The petition systematically challenges the government’s constitutional arguments. On telecommunications authority (Entry 31), it argues the Act doesn’t regulate communication infrastructure but rather “the activity of playing games.” Regarding industrial regulation (Entry 52), the petition disputes that online gaming constitutes an “industry” in the constitutional sense, and argues that “an absolute ban on the activity of online-money gaming cannot be enacted” even under this entry.

Most significantly, the petition contends that relying on interstate commerce provisions (Entry 41 or 42) would acknowledge gaming as a “legitimate activity, protected under Article 19(1)(g) and cannot therefore be completely prohibited.”

Fundamental rights violations

The petition presents a multi-pronged constitutional challenge based on alleged fundamental rights violations:

Business and Profession Rights: The petition emphasizes that “games of skill (involving risking of money or otherwise) are not res extra commercium but are a legitimate business activity protected under Article 19(1)(g) of the Constitution.” The filing argues the blanket ban “violates this fundamental right to carry on business” and is “not proportional.”

Free Speech Concerns: The petition alleges the advertising ban “imposes a restriction on freedom of expression” by prohibiting promotion of legitimate skill games and depriving players of recreational activities.

Equality Challenge: The petition characterizes the Act as “manifestly arbitrary, capricious, unreasonable” because it “treats unequal, distinct and separate categories of activities equally by adopting an overbroad classification lacking rational nexus with its objective.” The petition argues the law also creates an “unequal distinction between online and offline real money games of skill by discriminating against the former.”

Sweeping prohibitions target entire ecosystem

The petition argues the Act’s prohibitions are remarkably comprehensive, targeting not just gaming operators but the entire supporting ecosystem:

Complete Business Ban: The petition alleges Section 5 prohibits any person from “offer[ing], aid[ing], abet[ting], induce[ing] or otherwise indulg[ing] or engage[ing] in the offering of online money game and online money gaming service.” The petitioner argues this “prohibits the [Petitioner] from practising his legitimate profession and violating his rights under Article 19(1)(g).”

Advertising Blackout: The petition contends Section 6 “prohibits advertising related to online money game,” which the company views as a “violation of the right to free speech under Article 19(1)(a), and the right to promote one’s own legitimate business under Article 19(1)(g).”

Financial Blockade: According to the petition, Section 7 bars “banks, financial institutions, or any other person facilitating financial transactions” from processing payments for gaming services, creating what the petition characterizes as a financial embargo on the sector.

Harsh criminal penalties are disproportionate

The petition argues the Act imposes severe criminal sanctions that it characterizes as “excessive, disproportionate and manifestly arbitrary”:

• Offering gaming services: up to three years imprisonment or ₹1 crore fine
• Advertising violations: up to two years imprisonment or ₹50 lakh fine
• Financial transaction facilitation: up to three years imprisonment or ₹1 crore fine
• All gaming offenses are made cognizable and non-bailable

The petition also alleges the law grants sweeping enforcement powers to the Central Government, including website blocking “notwithstanding the safeguards provided in Section 69-A of the Constitution of India” and authorization of officers for “investigation, search, and arrest without warrant”—powers the petitioner claims are “unbridled, excessive, and contrary to Articles 20, 21 and 22 of the Constitution of India.”

Petition cites legal precedent supporting skill games

The petition emphasizes established legal doctrine distinguishing games of skill from gambling. The filing notes that “it is settled law that games of skill…are not res extra commercium but are a legitimate business activity,” citing Supreme Court precedents confirming that “‘wagering’ or ‘playing for stakes’ or ‘betting’ on a game of skill is not ‘gaming’/’gambling’.”

The petition argues the Act’s failure to maintain this distinction “does violence to this constitutional difference” and represents a departure from decades of legal precedent recognizing skill-based gaming as legitimate commerce.

Warns of economic devastation

The petition warns of severe economic consequences from the legislation. According to the filing, the company alone employs 606 individuals and has attracted significant foreign investment. The petition argues the broader sector employs “lakhs of employees” and represents substantial “investments” that would be lost.

The petition argues the legislation will “shut down” the entire skill gaming sector, undermining the government’s own economic objectives. According to the filing, the sector is projected to play a “critical role in achieving the Government’s stated vision of a USD 5 trillion-dollar economy.”

Policy reversal without consultation

The petition characterizes the Act as an “apparent volte face, contrary to every statement made earlier” by the Union Government, implemented with “no previous public consultation or debate.”

According to the petition, previously the Ministry of Electronics and Information Technology had engaged with sector stakeholders through draft IT Rules amendments aimed at protecting “users from the potential harms of illegal online gambling, while promoting the growth of a legitimate gaming sector.” The petition notes the Prime Minister had even encouraged “Made in India gaming products” and interacted with gaming community members.

Self-Regulation already addresses concerns

The petition argues that “all the supposed adverse effects of Online Gaming have already been addressed” through comprehensive self-regulation:

Responsible Gaming Measures: According to the petition, the platform offers self-exclusion features, identifies impulsive behaviors, reduces deposit limits for vulnerable users, and connects them with professional counselors.

Fair Play Certification: The petition states the company uses Random Number Generator (RNG) software certified by i-tech labs, with studies by IIT-BHU affirming RNG reliability. The filing notes they maintain a “no-bot certificate” from Gaming Laboratories International.

Financial Transparency: The petition alleges all transactions occur through “official banking channels” with full KYC compliance and regular tax payments (Income Tax and GST). The petition asserts that “no money laundering or terror financing happens on the Petitioner’s Platforms.”

Offshore gaming threat

The petition warns that the prohibition will create unintended consequences by driving players to unregulated operators. According to the filing, the ban “will only drive individuals seeking to play such games to shift to fly-by-night operators, and the offshore illegal betting and gambling operators.”

The petition argues this outcome would “defeat the stated objectives of the Impugned Act and effectively fostering and increasing activities that are actually deleterious and pernicious.” The filing notes early reports already indicate that the “ban sparks offshore betting ad blitz,” suggesting the predicted shift is already underway.

Unconstitutional delegation of powers

The petition identifies “a pattern of legislative abdication” in the Act, which it alleges grants “sweeping powers on the Executive” without adequate policy guidance or limits. According to the petition, the law authorizes the Central Government to constitute regulatory authorities “without any consultation with sector bodies” and empowers them to unilaterally determine game classifications.

The petition argues that conferring “penal consequences for breach of undefined (and as yet unknown) executive ‘directions'” represents unconstitutional delegation of legislative power.