The real-money gaming industry in India has been in the news over the past few months. The sector was brought into the limelight recently after the Tamil Nadu Cabinet, on September 26, approved an ordinance banning all forms of online skill games within the state.
On October 8, the State Governor, RN Ravi, signed and approved the ordinance. On October 19, the Tamil Nadu Assembly passed a Bill moved by Chief Minister M.K. Stalin, prohibiting all forms of online gambling. This Bill, like the one passed in February 2021, classifies all forms of online games as 'games of chance.'
The new law called the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022, was modelled based on the recommendations put forth by a committee led by a retired judge of the Madras High Court, K. Chandru. In its 71-page report, the committee has remarked that online games do not involve skill and are a major source of addiction and debt among the youth. The committee believed online games are impossible to regulate and therefore have to be outright banned.
The state government is yet to notify the date from when this law will go into effect. The gazette notification issued by the government noted that online games and gambling were highly addictive, leading to suicides, affecting mental health, and ruining families.
In light of the passing of this Bill, online casinos, gambling and betting have been banned in Tamil Nadu. For a large section of the population, this is a positive step towards curbing gambling, especially for the youth who get easily attracted to online gaming.
Soon after the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021 was passed by the Tamil Nadu State Assembly last February, skill-based gaming firms Junglee Games, Play Games24x7, Head Digital Works, and industry body All India Gaming Federation (AIGF) challenged the blanket ban in the Madras High Court.
The matter was heard by Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy. During one of the sessions, Banerjee criticized the state government’s blanket ban on online gaming. He highlighted how denying individuals from earning their livelihood through gaming skills is a gross violation of their rights.
The state government was represented by Advocate General R. Shunmugasundaram, who, while defending the government’s action, brought to attention the cases where some people committed suicide after suffering losses through online games. The Chief Justice retorted, “Just because one madman had indulged in such a thing does not mean you can impose a blanket ban on all games of skill.”
Chief Justice Banerjee used the example of Egyptian actor Omar Sharif to explain his thoughts on the wrongness of the blanket ban. The ‘Doctor Zhivago’ star was a renowned contract bridge player. At the 1964 World Bridge Olympiad, he was a part of the United Arab Republic bridge squad, and in 1968 he captained the Egyptian team in the Olympiad. Due to his immense talent as a bridge player, Sharif honed his skill and earned a lot of money through it. The Chief Justice pondered that if the state banned playing games, anyone with skills like Sharif would be prevented from displaying their talents. This, in turn, would be an infringement of their rights.
On August 3, 2021, the Madras High Court struck down the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021, stating it was "excessive and disproportionate." The state government challenged the Madras High Court judgment in the Supreme Court, and the matter is presently sub judice.
Despite the case being heard by the Supreme Court, the Tamil Nadu government, under mounting political pressure from the opposition, has enacted another law banning online gaming, including skill games such as rummy and poker. This, in turn, resulted in many top online gaming sites blocking users from Tamil Nadu.
Currently, there are over 400 Indian gaming companies, and the country has 420 million online gamers, which is second only to China, per a KPMG analysis.