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Tamil Nadu Governor R N Ravi on Monday cleared a Bill to ban online gambling, including rummy and poker with stakes, dealing a blow to the industry in the state.
However, online gaming industry officials told Business Standard that they would be seeking legal recourse and approach the high court against the move. “We will be taking legal advice in this regard and will be approaching the high court soon,” said Malay Kumar Shukla, secretary, E-Gaming Federation (EGF).
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This was the second time that the Bill was placed before the governor for his assent. In the first instance on March 8, Ravi had returned it saying that the state had no “legislative competence” to frame the Bill. However, the Bill was again passed unanimously in the state Assembly on March 23.
Last week, the Ministry of Electronics and Information Technology had notified new gaming-related amendments to the IT Act 2021, allowing multiple self-regulatory organisations to take a call on whether a real-money game should be allowed in India. Industry bodies are of the view that the Centre has the rightful mandate to regulate online gaming.
“The central government has anyway notified the online games rules, and as we have said it has the rightful mandate under the Constitution to regulate online gaming. What this (Tamil Nadu) law in effect does is (that it) treats and conflates games of skill as gambling and games of chance. The law also completely misunderstands technology and prohibits random number generators, which are an integral part of fairness for online gaming,” reacted Roland Landers, chief executive officer, All India Gaming Federation (AIGF).
He said the move was disappointing, as “it disregarded six decades of established legal jurisprudence and also the recent judgment of the Madras High Court” which struck down a similar law.
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“As the oldest and largest industry body, representing the highest number of Indian MSME (micro, small and medium enterprises) start-ups, we will challenge the constitutionality of the law once the effective date is notified. We have full faith that our judicial system will uphold the fundamental rights of the gaming platforms and their users,” he added.
In June, a committee headed by Justice K Chandru had submitted its report in Tamil Nadu on the effects of online games with stakes on its users. The panel not only suggested a ban on online games with stakes, but also batted for a ban on advertisements that encourage people to play them. It is not clear whether the current ordinance includes the advertisement aspect 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 involving stakes.
Though the All India Anna Dravida Munnetra Kazhagam government brought a law banning online games in February 2021, the high court struck it down in August 2021. The M K Stalin-led Dravida Munnetra Kazhagam government moved the Supreme Court with an appeal in this regard in November 2021.
Landers argued that the AIGF has been engaging with the Tamil Nadu government to understand its concerns and also made the latter aware of the “proliferation of offshore gambling websites and apps that flourish when constitutionally protected India apps are banned, as was also seen during the previous unconstitutional ban by the state government”.
While the gaming industry has welcomed the Centre’s rules, some concerns remain.
Other than Tamil Nadu, Karnataka, Telangana and Andhra Pradesh have also banned online games with stakes. “The rules have distinguished between online games and real money games. However, betting and gambling remain a state subject. States have their own laws. So, the rules are not expected to have any major impact on the workings of state governments,” said Rajan Navani, founder and chief executive officer of gaming intermediary JetSynthesys.
