Industry considers options as Tamil Nadu ordinance bans online gaming

Sector takes hope from High Courts previously overturning such prohibitions by state governments

Online gaming is not gambling but entertainment, said the $2 billion Indian industry on Tuesday after the Tamil Nadu cabinet approved an ordinance banning the practice.

According to a report by Koan Advisory, some 500 million people play online games in India. Telangana, Andhra Pradesh and Odisha have bans on online gaming, prompting the industry to fight legal battles. The Tamil Nadu government has said that the ordinance will be promulgated after getting clearance from governor R N Ravi.

“We will be able to come up with our views only after knowing what is being written in the ordinance. In terms of revenue to the industry, Maharashtra, Karnataka, Tamil Nadu and Delhi NCR are the major contributors,” said Sameer Barde, chief executive of the E-Gaming Federation.

“This cannot be regulated under gambling, it should be regulated under entertainment. At present, a ban is applicable in only three states and in states like Karnataka, Kerala and Tamil Nadu, the respective High Courts had turned down the bans,” Barde said. The global online, or fantasy, gaming industry is expected to be worth $38.6 billion by 2025. According to experts, the Indian industry is growing at a compound annual growth rate of 35 per cent.

The Indian industry is looking for central government regulation, rather than guidelines coming from each state. In May this year, the central government set up a committee to regulate online gaming. The committee includes the chief executive officer of NITI Aayog and secretaries of the ministries of home, sports and youth affairs, information and broadcasting, and electronics and information technology.

Separately, a committee headed by former judge K Chandru gave a report recommending that the Tamil Nadu government ban online games that involved stakes. It also suggested banning advertisements that encourage people to play such games. It is not clear whether the Tamil Nadu ordinance includes the advertisement aspects as well. The report had highlighted that in the last three years at least 17 people lost their lives in the state due to online games with stakes.

Tamil Nadu’s previous AIADMK government introduced legislation in February 2021 to ban online games, but it was struck down by the High Court in August 2021. The DMK government then approached the Supreme Court in November.