New Delhi, Aug. 29 -- India's first legal challenge to its new online gaming prohibition has emerged, with a real-money gaming firm taking the government to court. On Thursday, the Karnataka High Court agreed to hear a petition filed by Heads Digital Works Pvt. Ltd, challenging the constitutional validity of the new law.

The petition, seen by Mint, argues the law is unconstitutional because it fails to distinguish between games of skill and games of chance-a distinction upheld by Indian courts for decades. It contends that by equating skill-based games like rummy and poker with gambling, the law exceeds Parliament's legislative authority, a power traditionally reserved for state governments.

The company said the ban infringes on its fun...