Madras HC quashes Tami Nadu law banning online games like rummy and poker

A two-judge bench said complete ban is disproportionate and irrational, adds that govt can still introduce an appropriate law that conforms to Constitutional principles of propriety

In a major boost to the online gaming industry, the Madras High Court has revoked a law by the state government banning online games like rummy, poker and other skill-based games that involve stakes.

Quashing an amendment on the Tamil Nadu Gaming Act that banned online games, a two-member bench of Chief Justice Sanjib Banerjee and Justice Senthil Ramamoorthy stated that ‘complete ban on online games is disproportionate and irrational’.

The Madras HC said the Court was not against these games, and that nothing in the order will prevent the government from introducing appropriate legislation on the issue conforming to Constitutional principles of propriety.

Roland Landers, chief executive officer of All India Gaming Federation (AIGF) said, “We welcome the order of the Madras High Court which iterates that the Court is not against online gaming, and calls for the government to devise a regulatory framework to provide clarity to the sunrise online gaming industry with a view to encourage investments leading to technological advancements as well as generation of revenue and employment.”

According to estimates by KPMG, the online gaming industry in India is set to grow at a compound annual growth rate of 21 per cent over FY21-FY25 to reach a size of Rs 29,000 crore from the current Rs 13,600 crore. Based on AIGF estimates too, the pandemic has seen a 50 per cent rise in the number of mobile gaming users in India.

The states that had banned online games also reportedly included Andhra Pradesh and Telangana. The logic that the state government had highlighted while banning it through an ordinance in 2020 was the rising number of criminal activities and suicides.

Based on a report by EY and FICCI, the online gaming industry grew 18 per cent in 2020 to reach Rs 7,700 crore. It showed that the number of online gamers too increased from 300 million in 2019 to 360 million in 2020.