Madras HC Verdict: What Does the Verdict on Online Gaming Reveals

There has been some animosity against online gaming, with increasing numbers of people advocating for either regulation or a prohibition. While ‘games of skill' have received widespread acceptance, ‘games of chance' have been roundly condemned.

In what many in India's online gaming industry characterized as a watershed decision, the Madras High Court recently threw down in its entirety the modification to the Tamil Nadu Gaming Act that outlawed online games such as online rummy and online poker with stakes.

According to the Court, by imposing a broad-based, comprehensive prohibition, the amendment failed the least intrusive test and violated Article 19 (1) (g) of the Constitution. The challenged amendment was found to be arbitrary, illogical, excessive, and disproportionate by the court.

In The Hindu, Advocate G Natarajan argued that what was before the Madras High Court was, on the one hand, the right to freedom bestowed upon individuals to live their lives in their way, and on the other, the freedom to carry on any lawful business, interlinked with notions of morality, politics, and appeasement.

In some ways, the discussion in the state began when a few incidents of suicides were publicized as a result of suspected addiction to online gaming.

In a case, the Madras High Court stated that the court hopes and trusts that the government will take note of the current alarming situation and pass appropriate legislation, thereby regulating and controlling such online games through a license, while keeping in mind the law of the land as well as judicial precedents in this regard.

The history and origin of the Gaming Act

The state adopted an ordinance in November 2020 to prohibit online gambling, wagering, or betting in the cyber world. This ordinance was later amended by the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021 as an amendment to the Tamil Nadu Gaming Act 1930.

Before the modification, the Tamil Nadu Gaming Act 1930 specifically outlawed some games of chance, as stated in the Act. However, Section 11 of the Act specifically specified that these prohibitions would not apply to pure skill games.

However, with this modification, the thin line between “game of skills” and “game of chance” was questioned, and the scope of Section 11 was reversed, saying that if a game of skill is played with a bet, wager, or money at stake, the law shall apply, and all persons involved shall be penalized. This indicates that if PV Sindhu resided in Tamil Nadu, she may be charged under this Act.

According to Natarajan, the aforementioned parliamentary measure was criticized as being broad, unfair, and excessive. It was argued that Entry 34 of List II of the 7th Schedule to the Constitution grants legislative power to the states on “betting and gambling” and that what is not judicially laid down as not amounting to betting and gambling if brought under the ambit of the said Entry amounts to overarching, it was argued.

As a result, the Court had no choice but to strike down the amendments as violating the Constitution's protections of freedom. The Court further chastised the State for enacting such draconian legislation to placate voters before elections.

Finally, Natarajan remarked that he hoped the administration would return to a more realistic approach to the issue by balancing opposing interests. If morality is tried to be imposed from without in a rights-conscious society, doom is assured. Rather, the State and all of its stakeholders should work to create a cultural environment in which morality is organically planted, developed, and fostered, eliminating the need to preserve it externally.