Dream11, one of India’s most popular gaming apps backed by Tiger Global, is facing a police case in the state of Karnataka for alleged violation of a new local law that prohibits online gaming.
The state law, which came into effect this week, bans online games involving betting and wagering and “any act or risking money, or otherwise on the unknown result of an event including on a game of skill”.
Many gaming apps, including Sequoia Capital-funded Mobile Premier League, have stopped offering services to users in the state, but Dream11 had continued.
Police records on Saturday showed a case has been registered in India’s tech capital Bengaluru, in Karnataka, against Dream11’s founders following a complaint by a 42-year old cab driver who reported the gaming app as being operational after the ban came into force.
Dream11 told Reuters it believes “the complaint is motivated,” but did not elaborate.
The company is examining its legal remedies and “we are a responsible, law abiding company and will extend our full cooperation to any authorities,” a spokesperson said.
The Dream11 app was still allowing users in Karnataka, home to India’s Silicon Valley, to play fantasy games on Saturday.
The Karnataka ban has intensified concerns that growing state regulations could hit the nascent but booming gaming sector in India, where foreign investors have pumped in millions of dollars in recent months.
The Dream11 and MPL platforms, offering paid contests with cash prize for players, have expanded rapidly in recent months with extensive marketing and hires. Dream11 is seeking a U.S. listing by early 2022, local media has said.
The Karnataka law imposes hefty fines and prison terms on violators and has been implemented amid growing concerns that online gaming platforms, like gambling, are addictive and can cause financial harm.
(Reporting by Aditya Kalra in New Delhi; Additional reporting by Vishwadha Chander in Bengaluru; Editing by Mike Harrison)
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