TN ban cannot apply to games of skill, rules HC

While the state’s Prohibition of Online Gambling and Regulation of Online Games Act, 2022, remains valid in terms of time, age limit and spending restrictions, it cannot be used to ban online titles of rummy and poker, the court said. These titles have been referred to as games of skill, and are seen under a different lens away from betting and gambling, the court ruled.

Previous laws, made along similar lines in both Karnataka and Tamil Nadu, were struck down by the respective state high courts. The states then moved the Supreme Court, where these cases are nearing verdict.

Officials at three top online gaming firms confirmed to Mint that their respective rummy and poker games have restarted in Tamil Nadu. However, the sector remains cautious on how discussions on this will proceed. “Most court precedents lie in our favour, but there is some amount of confusion among certain regulators and legislators on the nuance between an online game of skill and chance. In the end, it should not be overlooked that rummy does involve skill—and that should be enough to differentiate us from outright gambling,” a gaming company executive said on the condition of anonymity.

In August 2021, the Madras high court struck down the Tamil Nadu government’s efforts to ban online fantasy games, rummy and poker in the state. The state moved the apex court, before passing an ordinance banning online real-money games in the state at the end of last year.

Three lawyers with knowledge of the matter said that the Tamil Nadu government may appeal the latest verdict at the Supreme Court as well. Two of them said that the Supreme Court has set a 7 December date to hold a combined hearing with the Tamil Nadu government, as well as the Karnataka government, on matters related to online gaming. The Directorate General of GST Intelligence’s Supreme Court appeal against Bengaluru-based online gaming startup Gameskraft is a separate matter, the lawyers added.

Industry stakeholders and experts said they had expected a verdict on these lines. “The order is a reiteration of the well-established principle and several recent high court judgments that games of skill, whether played online or offline, with stakes or otherwise cannot be banned by states,” said Jay Sayta, a technology and gaming lawyer.

Roland Landers, chief executive of All India Gaming Federation (AIGF), added, “This decision by the Madras high court is yet another validation of what the online skill gaming industry has always maintained in relation to online skill games being a legitimate business activity—protected under the Constitution of India. This also adds to a long line of judgments from the Supreme Court, Karnataka, Kerala and Madras high courts upholding the legitimacy of such games.” AIGF was a petitioner on behalf of multiple online gaming startups at the Madras high court, against the Tamil Nadu government’s Act.

Anuraag Saxena, chief executive of industry body E-Gaming Federation, said that a “forward-looking policy” from both state and the Centre on online gaming could “significantly drive and support the growth of this emerging sector.”

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Updated: 10 Nov 2023, 01:12 AM IST