November 28, 2023
High Court recently in the case of All India Gaming Federation v. State and
Ors., WP 13203 of 2023, nullified the Tamil Nadu Government’s ban on online
rummy and poker. The Hon’ble Court specified that the ban can be imposed on
games of chance, but it should not extend to Rummy and Poker, which are
considered games of skill.
By way of background, the All-India Gaming Federation, Gameskraft, Games24x7, Head Digital, and Junglee Games were amongst the petitioners who challenged the constitutionality of the Act, arguing that states only have the power to regulate gambling, but not games of skill and hence, the Act is unconstitutional and violative of their fundamental rights. They further contended that while the game of rummy and poker is legally permissible and construed as games of skill when played physically, it becomes illegal when played online. They further submitted that the Central government had already established regulations under the Information Technology Act to address concerns related to online gaming, and hence, the State is not competent to have parallel legislation on the same.
On the other hand, the counsel for the Tamil Nadu Government argued that it was the Centre that overstepped into the State’s domain, as the State holds the authority to enact legislation prohibiting online gambling and regulating online skill-based games. It was contended that in light of the various judicial pronouncements, the Courts have held that even though Rummy is considered a game of skill, it can be subject to regulation if it involves gambling or generates revenue. They further contended that bots or Artificial Intelligence are being used while playing the online game of rummy on the petitioner’s platforms. They further contended that no individual player adversely affected by the online rummy ban had sought legal recourse, implying that the gaming companies, driven by profit motives, were the only ones challenging the ban.
The Court while partly allowing a batch of writ petitions held that the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 cannot be entirely declared unconstitutional and hence, the Act will be applicable only to games of chance. The Court further held that the definition of ‘online gambling’ under Section 2(i) of the Act, shall be read as restricted to ‘games of chance’ and not games involving skill viz. rummy and poker. The Hon’ble Court, however, affirmed the state’s prerogative to enact regulations on these games and emphasized that the government may regulate both skill and chance-based games by imposing restrictions such as playtime limits, minimum age limits, etc., but cannot enforce a complete ban on skill-based games. The Court further noted that the State has miserably failed to substantiate its allegation against the petitioners of employing bots or the alleged use of AI for gameplay and stated that if the State comes across the usage of bots or any deceptive methods in the play of games of rummy and poker, the State retains the right to initiate action against such illegal activities.
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