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.
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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