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Gaming Report: Karnataka High Court Pulls Up State Government For Delaying Policy Decision on Online Gaming & More

Gaming Report
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  • Namita Ghosh July 3, 2021
  • 4 Minutes Read

The Karnataka High Court has once again leaned on the state government to make its stance on real-money online gaming clear. On Tuesday, while hearing the PIL filed by Sharada DR, a division bench led by Chief Justice Abhay Shreeniwas Oka directed the State Chief Secretary to file an affidavit with the court, submitting the government’s decision on the matter.

In a move that has all but doomed the prospects for online poker in Germany, the German parliament has approved the new State Treaty on Gambling (GlüNeuRStv), approving in the process the controversial 5.30% tax on online poker and slots. The new tax rates are effective from July 1, and as an immediate fallout, operators like Unibet and PokerStars have removed most cash game tables from their offerings for German players.

One of Las Vegas’ small poker rooms, the Planet Hollywood Poker Room, will be shutting down permanently on July 11, following significant losses during the COVID-19 led shutdown. The resort owner, Caesars Entertainment, confirmed the news recently.

Bally’s Corporation has entered a 15-year sports-betting partnership with the U.S. Women’s National Basketball Association (WNBA) team, the Phoenix, Arizona-based Phoenix Mercury, starting on July 1. It is the first gaming access deal for a professional women’s sports franchise. The agreement also marks Bally’s entry into Arizona, where it will be offering digital and offline sports betting services.


Karnataka High Court Raps State Government Over Continued Inability to Take a Stand on Online Betting

The imbroglio on online betting and gambling in Karnataka continues with the Karnataka High Court once again questioning the continued indecision of the state government on online betting and gambling. On Tuesday, during the hearing of the PIL filed by Sharada DR last November, a division bench led by Chief Justice Abhay Shreeniwas Oka directed the State Chief Secretary to file an affidavit with the court, clearly spelling the government’s decision.

Karnataka High Court

At the hearing, the government’s legal representative submitted to the court that some “action” was being taken and requested a two-week extension to respond on the matter.

The court pointed out that the government had already been granted sufficient time of four months but had failed to table the cabinet decision on the matter or take a clear stand on the demanded ban on online gaming.

A Times of India (TOI) report quoted the bench as stating – “Why is the state government hesitating to take a stand? We are struggling to find out. As of today, the state has not placed on record its stand…We have no option but to direct the chief secretary to file an affidavit as to why the orders of this court have not been complied with. The affidavit shall be filed within one week from today. The matter may be listed on July 8 for considering the affidavit.”


Why the Continued Delay?

This is the second time the Karnataka High Court has directed the state government to make a clear policy decision on real money online gaming.

Garden City has an illustrious history, especially for the poker industry. The Karnataka High Court was one of the first legal institutions in India to grant the game a legal stature in October 2013.

However, the winds of law have changed in the past few years. And nowhere has this change been more apparent than in southern India that saw several states imposing blanket bans on poker and other forms of online gaming. To bring the background of the issue to light, Telangana was the first Southern state to ban real-money online gaming. Last year, two more states, Andhra Pradesh and Tamil Nadu, joined the list. The Kerala government has also made it clear its intention to amend the Kerala Gaming Act 1960 by removing the special exemption granted to online rummy that would make rummy and other real money online games illegal.

The Karnataka government has also indicated a move along similar lines. Last November, the state home minister Basavaraj Bommai hinted towards the government`s plan to promulgate an ordinance to ban online gaming. The same month, Sharada DR filed the PIL demanding a complete ban on all forms of real money online gaming in the state. The matter was opposed by The Online Rummy Federation (TORF), which sought to be impleaded as respondent in the case. The TORF also represented to the Chief Minister, calling for a license-fee-based regulatory mechanism instead of a blanket ban on real-money gaming.

The court accepted TORF`s request in February and directing it to file its statement of objections within six weeks. At the same time, the state government informed the court of its plans to bring in legislation to regulate online betting, seeking six weeks to table a proposal for the same before the state cabinet.

The matter was last heard on March 31. The court had granted the government time till May 27 to file its decision.

Last month, Karnataka High Court granted a significant relief to the horseracing sector by striking down section 31A (3) of Central GST Rules, 2017 and section 31A of the Karnataka GST Rules, 2017 that imposed GST liability on the entire bet amount received by the horse racing clubs. While on the one hand, the horseracing clubs like the Bangalore Turf Club (BTC) will be able to deal with the enormous losses they have faced during the pandemic under the new GST protocols. On the other, the future of online gaming in Karnataka rests in the hands of the government’s policy decision.


Germany’s Bundestag Approves Controversial 5.3% Rollover Tax on Online Poker

In June, we had reported that the European Gaming and Betting Association (EGBA) had filed a formal complaint with the European Commission (EC) against Germany’s proposal to impose a 5.30% tax on online poker and slots.

Notwithstanding the complaint, Germany’s national parliament, the Bundestag, approved the controversial rollover tax on online gambling, which is part of Germany’s new State Treaty on Gambling (GlüNeuRStv). The same came into effect on Thursday, July 1.

German Parliament

The new rollover tax issue deals primarily with how revenue and profits are defined for poker operators. Most gaming jurisdictions in Europe and other places calculate revenue and profit for taxation basis the Gross Gaming Revenue (GGR), taking the entirety of a player`s poker session as the amount they wager minus the amount they win. However, German players will have to pay taxes every time they play an online poker hand.

This new taxation is being applied only to online operators, giving rise to protests, and in addition to the EGBA, the Deutsche Sportwettenverband (DSWV) has also opposed the move. The DSWV has filed a separate complaint with the EC.


Operators Reduce Game Offerings

After the Bundestag approved the new rollover tax, Unibet Poker immediately removed its cash games and single-table tournaments.

PokerStars has also cut down its operations in Germany and removed all the medium and high-stakes cash games, some SnGs, and other turbo-paced single-table offerings. In a blog post dated June 24, the site listed out the changes it is affecting for German players, later confirming that “it is no longer viable for us to offer higher stakes cash games” in Germany.

The company stated – “It goes without saying that we are disappointed to have to make this change, and we understand that players will feel that the rake is unfair. Although it will be of little consolation to those of you affected by this change, we want to let you know that we are doing everything we can to reduce the cost to our players.”


Planet Hollywood Poker Room Will be Closing Down on July 11

The Caesars-owned Planet Hollywood Poker Room will be shutting down permanently on July 11, joining an increasing list of Las Vegas-located poker rooms like Binion’s, Mandalay Bay, Mirage, and Excalibur that were made to fold their hand under the brunt of the COVID-19 pandemic and insurmountable losses.

Planet Hollywood

A Caesars Entertainment spokesperson confirmed the closure. “Guests may visit the nearby poker rooms at Bally’s Las Vegas, Flamingo Las Vegas, and Caesars Palace,” the spokesperson said.

Although one of the smaller poker rooms in Vegas, with the capacity of 10 poker tables, the poker room has traditionally hosted the Phamous Goliath Series slated for a 2021 run between May 28 to July 8.

Planet Hollywood had also hosted the 2019 WSOP Circuit Planet Hollywood, which will become the last live poker tournament series to be hosted at the venue once the poker room shuts down next week.


Bally’s Inks Sports Betting Partnership With Phoenix Mercury

In a historical move, Bally’s Corporation has inked a sports betting partnership with the U.S. Women’s National Basketball Association (WNBA) team, the Phoenix, Arizona-based Phoenix Mercury. According to Phoenix Mercury, the deal is the “largest level investment in women’s professional sports history.”

Ballys inks deal with Phoenix Mercury

Phoenix Mercury shared the news on Twitter.

The agreement makes Bally’s Corporation the exclusive sports betting partner of Phoenix Mercy for 15 years, starting July 1. It is also the first gaming access deal with a professional women’s sports franchise.

Arizona now becomes the 15th U.S. state where Bally’s will have a market presence. In the last fortnight alone, Bally’s signed up a multi-year agreement with Kansas City-based Dodge City’s Boot Hill Casino and Resort, opening the doors for its entry into Kansas City. The company also beta-launched its mobile sportsbook, Bally Bet for Iowa.

Phoenix Mercury will next need to secure a mobile sports-betting license from the Arizona Department of Gaming before Bally’s can start operations in Arizona. The company will run a digital sports betting service and a brick-and-mortar sportsbook near the Phoenix Suns Arena in Arizona’s capital’s downtown area.

In an official news release, Bally’s Chairman Soo Kim said this parentship with Gamesys would “meaningfully accelerate our growth strategy to become a premier, global, omni-channel gaming company.”

The Phoenix Mercury franchise is owned by Robert Sarver and happens to be one of the original eight WNBA franchises, founded in 1997, right before the first-ever WNBA season began.

The CEO and President of Phoenix Mercury, Jason Rowley, called the agreement “an enormous step forward in advancing women’s sports,” which will “deliver fan engagement on an unprecedented scale in women’s sports.”

Incidentally, the agreement comes hot on the heels of another significant development for Bally’s. On June 30, the company’s shareholders granted their approval for the company’s merger with Gamesys, which Bally’s had acquired in April, this year.

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