State vs Centre: Karnataka’s Online Racing Bill sets up clash with online gaming ban

Karnataka is gearing up to legalise online wagering on horse racing, setting the stage for a direct confrontation with the Centre’s Promotion and Regulation of Online Gaming Act, 2025 (PROGA) — a law that imposes a blanket prohibition on wagering across both skill-based and chance-based online games.

The state government has readied amendments to the Karnataka Race Courses Licensing Act, 1952, enabling licensed platforms to offer online betting on racing events. The bill is expected to be tabled during the winter session of the legislature in Belagavi beginning December 8. Officials say the move aligns with the “current trend of expanding exposure to racing events” and mirrors practices in race clubs across other states including Tamil Nadu, Telangana, Maharashtra and West Bengal.

But the push comes even as Karnataka prepares a constitutional challenge to PROGA in the Supreme Court. As reported earlier, the state is finalising its petition arguing that the Centre has exceeded its remit by legislating on betting and gambling — subjects explicitly assigned to states under the State List.

Karnataka is “actively evaluating legal options” and may soon seek to join the batch of petitions pending before the apex court. “The Centre has clearly encroached on subjects that fall within the State List. We support regulation, not prohibition, but the Union has no constitutional authority to legislate on betting and gambling,” senior official said.

Legal experts share that view, calling the central law a “colourable exercise of power” that disrupts India’s federal balance. “Digital transmission does not magically convert a state subject into a Union subject,” a senior counsel said, warning that PROGA could become a precedent for central overreach across other sectors.

The proposed state amendments frame horse-race betting as a skill-led activity, echoing past judicial observations. Finance Department officials say wagering on racing involves “skill and knowledge” and should therefore be permitted on licensed online platforms. They also acknowledge that the move is designed to bolster state revenues by expanding participation in regulated betting.

The bill is one of 31 expected to be introduced during the upcoming winter session. If passed, Karnataka would become one of the first states to formalise online horse-race betting — a step that would openly contradict PROGA’s nationwide prohibition and amplify an already simmering Centre–state dispute over who controls India’s fast-growing online gaming ecosystem.