Court Throws Out Tamil Nadu's Online Skill Gaming Ban, Again

November 10, 2023
The Madras High Court has blocked a Tamil Nadu government ban on online skill gaming with stakes for a second time, ruling that the state authorities “miserably” failed to demonstrate that online versions of rummy and poker are not skill games.

The Madras High Court has blocked a Tamil Nadu government ban on online skill gaming with stakes for a second time, ruling that the state authorities “miserably” failed to demonstrate that online versions of rummy and poker are not skill games.

The ruling on Thursday (November 9) declared that the state government’s ban was “in excess of its legislative competence” in view of a large body of case law, including key Supreme Court of India rulings, that uphold the skill status of poker and rummy and thus their legality.

The 84-page judgement declared that online versions of skill games are no less skilled.

“To dub online games of rummy and poker as games of chance would be against the dictum of the Apex Court and the various High Courts,” it said.

While unsurprising, given the court’s similar decision in 2021, the ruling reinforces judicial protections for online gaming operators under siege from a crushing nationwide goods and services tax (GST) that equates skill-based and chance-based gaming.

In particular, chief justice Sanjay V. Gangapurwala and justice P.D. Audikesavalu rejected state attempts to discredit the technological propriety of online skill game products.

“The State has miserably failed to demonstrate that online games of rummy and poker are different and distinct from offline games of rummy and poker,” they wrote.

“The apprehension expressed by the State that bots may be used or the dealer (software) would know the cards are without any substantive material. In view thereof, the Schedule [of banned games] under Section 23, incorporating rummy and poker as games of chance, is set aside.”

The court brushed aside the bulk of the government’s argument, saving its toughest language for a government commission that used a poll of schoolteachers to allege social harm, as well as for the government’s technological attacks.

“In the present case … the respondent State could not even remotely demonstrate tampering of software or any such device that would take away the games of rummy or poker from the contour of games of skill.”

The ruling described the government’s bot theory of manipulable outcomes as “without any basis” and “merely on surmise”.

“There is nothing on record to substantiate the contention of the State that the dealer (software) knows all the cards all the time, including which card is going to be dealt with, or that the dealer (software) knows all the cards in the hands of each player or that the dealer (software) can change the unopened cards.”

The court was addressing petitions from five aggrieved parties, including skill gaming peak body All India Gaming Federation (AIGF) and leading companies Gameskraft Technologies, Play Games 24x7 and Flutter-owned Junglee Games.

However, most of the Prohibition of Online Gaming and Regulation of Online Games Act 2022, which was passed into law despite the Madras High Court and Supreme Court of India’s protection of online skill games, will remain in place.

The Madras court affirmed state government powers, including prohibition, over chance-based gaming (“gambling”) and the need to monitor and regulate industry activity to ensure compliance.

It also upheld powers to create “reasonable regulations” for gaming time limits, the age of users and other restrictions for all online gaming.

AIGF chief executive Roland Landers said the decision reinforced the national and state judicial defence of online skill games.

“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," he said in a statement on Thursday.

“We at AIGF believe that this decision will be a great boost for this sunrise sector and generate more certainty among investors and the gaming community at large,” he said.

Tamil Nadu is one of two appellants to the Supreme Court of India, with Karnataka state, over the legality of online skill gaming with stakes. That case is listed for a hearing on December 7, but it was not immediately clear if Thursday’s ruling will impact that appeal.

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