The Karnataka government has proposed a bill to legalize online wagering on horse racing, challenging the Centre’s Online Gaming Bill, 2025, which bans all real-money games regardless of skill or chance. The Karnataka bill aligns with Supreme Court rulings that classify horse racing as a skill-based game and aims to regulate betting through licensed platforms, potentially opening a new revenue stream. However, this state-level move conflicts with the Centre’s legislation, which asserts overriding authority to prohibit real-money online gaming nationwide, setting up an inevitable legal clash likely to reach the Supreme Court over constitutional jurisdiction between state and central powers.

This dispute arises amid broader concerns over the Centre’s Online Gaming Act, which has faced legal challenges for overstepping state authority on gambling and betting, traditionally state subjects. The Act’s broad definitions and blanket bans have disrupted the gaming industry, causing layoffs and forcing startups to pivot business models. Enforcement actions against gaming firms for alleged financial irregularities further complicate the sector’s landscape. The Karnataka bill and ongoing legal battles highlight tensions between state autonomy and central regulation in India’s evolving online gaming and betting ecosystem.