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The Madras High Court has rejected a gaming industry attempt to overturn a Tamil Nadu state law that imposes a late-night curfew and enhanced user verification on real-money gaming.
A two-judge bench on Tuesday (June 3) backed Tamil Nadu legislation and regulations that ban real-money gaming between midnight and 5am, rejecting complaints of paternalism and invasion of privacy from gaming companies and interests, including Games24x7, Junglee Games, Head Digital Works and the Esport Players Welfare Association.
The ruling upheld state counsel arguments that gaming late at night negatively influences the sleep and finances of users and compounds the risk of addiction.
The judges also defended a requirement that gamers use the state-backed Aadhaar identity number to access real-money gaming platforms. The Aadhaar biometric and demographic identification system covers almost the entire population of India.
Ahead of the Supreme Court of India's decisions on the legality of real-money online gaming and the application of the maximum goods and services tax (GST) rate to all gambling, the Madras High Court ruling may carve out space for regional governments looking to push back against constitutional protections for skill gaming.
The industry challenge to the current regulatory regime — a mix of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act 2022 and regulations issued in February by the Tamil Nadu Online Gaming Authority — attempted to frame the regime as invasive of privacy, as an encroachment on central government legislation on digital affairs, and as cover for an attack on constitutionally protected skill games with stakes.
But the High Court rejected these arguments and counsel’s theme of nanny-state paternalism, ruling that the state is constitutionally mandated to protect the health of the community.
“In the eyes of this Court, the submission put forth by the State is not restricted to just paternalism but goes a step beyond in ensuring the physical, mental and financial well-being of its citizens, which is its incumbent duty to protect,” the justices wrote.
“So right to privacy carries with it its own limitations and cannot be claimed in absolute. When put on a scale, a compelling public interest outweighs the right to privacy.”
The judges added that online real-money games had “created public health risks” in the state, citing reports from expert committees presented to the court and police allegations that 47 suicides in Tamil Nadu are attributable to online gaming addiction.
“The adverse effects [are] much larger to the people than the need for securing the individual right to free trade,” the justices wrote. “Regulation becomes a priority to ensure the safety and protection of the general public, and the actions of the government cannot be termed baseless or disproportionate.”
The court also held that online real-money games (RMGs) have characteristics such as user invisibility that render players more vulnerable.
“So it is imperative that the government take adequate steps to streamline and regulate these unexplored waters to ensure fair play and secure the physical and financial safety of the players indulging in these online RMGs,” the justices wrote.
