Not an easy game anymore: Dream11 goes offline for Karnataka users

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Following an FIR registered against it in Bengaluru for offering gaming services in violation of rules, Dream11, a popular gaming app backed by Tiger Global, has suspended operations in Karnataka. The police are investigating the alleged violation of a rule that prohibits online gaming. The state has recently enacted a law that prohibits online games that involve betting or wagering, as well as “any act or risking money, or otherwise on the unknown outcome of an event, including on a game of skill.”

“In order to allay our users’ concerns, we have decided to suspend operations in Karnataka. This decision is without prejudice to our rights and contentions under law,” The Economic Times quoted a company statement as saying.

Many gaming applications have stopped serving customers in the state, including the Sequoia Capital-backed Mobile Premier League, but Dream11 has continued with its offerings.

A case was filed against Dream11’s founders in Bengaluru on Saturday following a complaint from a 42-year-old cab driver who reported the gaming app was operating even after the ban came into effect, media had reported earlier.

Ban could stifle India’s burgeoning gaming sector

“The complaint is motivated,” another news report quoted Dream11 as saying. The gaming company, however, gave no further details.

The Karnataka ban has heightened fears that tightening state rules could stifle India’s embryonic but burgeoning gaming sector, where foreign investors have poured millions of dollars into the country in recent months.

With considerable marketing and recruitment, the Dream11 and MPL platforms, which offer sponsored contests with cash prizes for gamers, have grown rapidly in recent months. According to media reports, Dream11 is aiming for a listing in the United States by early 2022.

The Karnataka law, which mandates steep fines and prison sentences for violators, was enacted in response to rising fears that online gaming platforms, like gambling, are addictive and can lead to financial ruin.

“We are a responsible, law-abiding corporation and will give our full assistance to any authorities,” an unnamed company representative was quoted as saying in a report.

Dream11 is the latest to join the list of companies that have deactivated their platforms for users in Karnataka. Mobile Premier League (MPL), Paytm First Games and Games24X7 also feature in this list.