The explosion ripped through the city`s biggest gambling club, known as the Rummy Club, senior government official Sharfuddin Memon told AFP.
"It was a home-made bomb placed in a packet inside the club," he said.
The complex is located in the impoverished Ghasmandi neighbourhood in the south of the city.
Local police chief Iqbal Mehmood said: "We are investigating if it was an act of terrorism or the result of some internal rivalry."
"It could be the result of gang war which frequently erupts between criminal groups in Karachi."
The teeming city, with a population of 16 million, is Pakistan`s economic hub, home to its stock exchange and lifeline for a depressed economy wilting under inflation and stagnating foreign investment.
The port is plagued by ethnic and sectarian killings, crime and kidnappings.
Karachi is also politically tense and steeped in rivalries between the Urdu-speaking majority and an influx of ethnic Pashtuns from the northwest, which has been hit by Taliban insurgency.
Outbreaks of political violence killed more than 150 people last year and extremists targeted Shiite and Sufi religious gatherings, although attacks on government security forces in Karachi have been rare.
More than 40 people were killed over 18 days in March, officials said, amid heightened tensions between the Muttahida Qaumi Movement (MQM), which represents Urdu-speakers originally from India, and the Awami National Party (ANP), backed by Pashto-speakers.
The MQM and the ANP are partners in the Pakistan People`s Party-led coalition that rules the southern province of Sindh, of which Karachi is the capital. (*)
Editor: Kunto Wibisono
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