Madras HC strikes down Tamil Nadu govt’s ban on online rummy, poker

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  • The Madras High Court has restricted Tamil Nadu’s online gambling law to only games of chance.  
  • The state can however make rules to regulate the time spent or age limits for skill-based games 
  • India’s real-money gaming industry associations have welcomed Madras High Court’s verdict. 
  • AIGF claims to have over 100 members including skill-gaming companies and game developers across all formats and genres.   
  • Landers said this decision is a step in the right direction and will generate more certainty among investors and the gaming community at large, thereby providing a “great boost for this sunrise sector”. 
  • E-Gaming Federation represents prominent online rummy and poker operators such as Games24x7, Head Digital Works, and Junglee Games.  

The Madras High Court refused to entirely strike down the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022. However, it did rule that the law will not apply to skill-based games such as online rummy and poker, providing a relief to online money gaming operators.

The state government, however, is free to formulate rules to regulate the time spent or age limits for these online money games, the division bench of Chief Justice Sanjay Gangapurwala and Justice Audikesavulu said.

“By reiterating that online rummy and online poker are games of skill, 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,” said Roland Landers, CEO of All India Gaming Federation (AIGF).

AIGF claims to have over 100 members including skill-gaming companies and game developers across all formats and genres.  Landers said this decision is a step in the right direction and will generate more certainty among investors and the gaming community at large, thereby providing a “great boost for this sunrise sector”.

This judgment however comes amid a turbulent time for the country’s real-money gaming industry that is navigating through a turbulent period posed by the government’s new 28 percent goods and services tax (GST) regime which became effective from October 1 and a slew of retrospective tax notices that have hit several skill-based gaming firms.

The government had banned online rummy and poker in the southern state earlier in April, terming them as online games of chance in the legislation, thereby bringing them under the purview of online gambling. Gambling is a state subject in India.

The legislation had led to several online rummy and poker platforms barring users from playing paid contests in the state. The Madras High Court had initially refused to grant an interim stay on the operation of the law in April 2023.

E-Gaming Federation represents prominent online rummy and poker operators such as Games24x7, Head Digital Works and Junglee Games. Saxena said that they are optimistic that these judgments will urge state governments to explore “more progressive” policy frameworks and regulatory structures for the sector.

This online gambling law came into being after Tamil Nadu chief minister MK Stalin set up a five-member committee led by retired Justice K Chandru to analyze the negative effects of these games and make recommendations for a new law prohibiting “online gambling games” on June 10, 2022.

 

(With inputs from agencies)

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