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LexCognito

This issue of LexCognito, which in Latin means 'awareness about law', seeks to provide you an insight into significant legal and regulatory developments that have taken place very recently in India.


Date: 5 August 2021
Lex Cognito: Madras High Court strikes down Tamil Nadu Amendment Law banning online games with stakes
The Madras High Court, vide its order dated 3 August 2021 in the matter of Junglee Games India Private Limited vs. State of Tamil Nadu, has struck down Part II of Tamil Nadu Gaming & Police Laws (Amendment) Act, 2021 which amended the Tamil Nadu Gaming Act, 1930 to ban playing of games such as rummy and poker on cyberspace with stakes, by declaring it as unconstitutional.

The verdict was delivered while allowing a batch of writ petitions filed by a host of private companies offering online games challenging the legal validity of ordinance promulgated by the Tamil Nadu Government banning online wagering and betting in cyber space. The amendment encompasses within its sweep all sporting activities, if played for a prize, whether between two class teams in a school or between two schools in an inter-school competition, if there is a trophy to be won.

The Court noted that there appears to be a little doubt that both rummy and poker are games of skill as they involve considerable memory, working out of percentages, the ability to follow the cards on the table and constantly adjust to the changing possibilities of the unseen cards. Poker may not have been recognised in any previous judgment in this country to be a game of skill, but the evidence in such regard as apparent from the American case even convinced the Law Commission to accept the poker as a game of skill in its 276th Report.

The Court held that by imposing a wide-ranging blanket ban, the State has failed to meet the “least intrusive” measure test and therefore, the amendment falls foul of Article 19 (1) (g) of the Constitution of India, which grants right to practise any profession, or to carry on any occupation, trade or business. It further held that the amendment in itself was capricious, irrational, excessive and disproportionate.

While striking down the amendment in its entirety for being ultra vires the Constitution, the Court added that nothing herein will prevent an appropriate legislation conforming to the constitutional sense of propriety being brought in the field of betting and gambling by the State.

Chrilegal Comment:

The gaming industry in India is struggling due to lack of one unified law dealing with gambling. Every State has a different legal position as the power to legislate on betting and gambling is a state subject under Constitution of India. Gambling including game of chance is banned in most States. However, a game of skill has been differentiated from a game of chance although there is no clarity on such distinction and the courts in India adjudicate based on facts of each case. This judgement is expected to be hailed by most of the industry players as it has struck down the law which had irrationally put blanket ban on online gaming without distinguishing the game of skill from game of chance based on judicial precedents as laid down by the courts in India.

 
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Chambers of Rajan & Indraneel 
T: +91 11 41000224, 41030225| Fax:+91 11 29239074 
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Chambers of Rajan & Indraneel is a premier full service law firm headquartered at New Delhi, India. The Firm represents amalgamation of vast experiences and practices of two eminent lawyers. Indranil Ghosh is highly reputed as a disputes lawyer. He was a senior partner and head of litigation practice in one of the oldest Indian law firm Fox Mandal for several decades before setting up his own practice. Rajan D Gupta is a rank holder Chartered Accountant turned Corporate Lawyer. He is also a licensed Insolvency Resolution Professional. He has been associated with internationally renowned big law firms in past and has held senior level positions in firms like PwC, Fox Mandal, Khaitan & Co. and SRGR Law, etc. before starting the Firm.

We have a team of experienced Lawyers, Chartered Accountants, Company Secretaries and Insolvency Resolution Professionals with access to network of high quality experienced lawyers in all major commercial cities of India.

The Firm offers a wide range of expert legal services in the areas of corporate and commercial laws and specializes in representing major foreign and domestic corporations with diverse business interests in India. The Firm is professionally equipped to handle large sized and complex corporate transactions like Mergers & Acquisitions, Corporate Restructuring, Joint Ventures, Inbound & Outbound Investments, Private Equity and Venture Capital Investment Transactions, Real Estate Transactions, Infrastructure Projects, Project Finance, Power Projects, Non-Conventional Energy Projects, Highways & Road Projects and Corporate Taxation as well as GST, etc. The Firm also offers proven capabilities in litigation and dispute resolution practice areas, especially in handling international and domestic arbitrations as well as litigation in Supreme Court, various High Courts of India and various judicial and quasi-judicial tribunals/forums including at National Client Law Tribunal, Appellate Tribunals, Tax Tribunals, Competition Commission, Electricity Tribunal, Telecom Disputes Tribunal, Designated Authorities and other adjudicatory bodies.


We have set up a Japan Business Desk (JBD) in order to serve our Japanese clients in a better way. The endeavour of JBD is to act as a bridge between our professionals and clients from Japan so as to ensure that there are no barriers as to linguistic and cultural differences. This will indeed facilitate Japanese corporates doing business in India. 
 
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This newsletter contains general information available in public domain at the time of its preparation. It is intended as a general news update and is not intended to be comprehensive nor to provide specific business, financial, investment, legal, tax or other professional advice or opinion or services. This newsletter is not a substitute for such professional advice or services, and it should not be acted on or relied upon or used as a basis for any decision or action that may affect you or your business. Before making any decision or taking any action that may affect you or your business, you should consult a qualified professional adviser and refer to the source pronouncement/documents on which this business alert is based. It is also expressly clarified that this newsletter is neither a solicitation nor an invitation of any sort whatsoever or a source of advertising from our firm or any of its partners or lawyers or other professionals to create any adviser-client relationship. Whilst every effort has been made to ensure the accuracy of the information contained in this news alert, this cannot be guaranteed, and neither our firm nor any related person/entity shall have any liability to any person or entity that relies on the information contained in this publication. Any such reliance is solely at the user's risk.
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