TN Law Regulating Online Games Won't Apply To Games Of Skill Like Poker & Rummy : Madras High Court

The bench of Chief Justice SV Gangapurwala and Justice PD Audikesavalu thus partly allowed an application filed by the online gaming companies challenging the Act. The online gaming companies had challenged the Act, which came into effect on April 21. Earlier, an attempt was made to challenge the ordinance, but the court allowed the parties to withdraw the same as the Act was yet to be notified.

The court today said that while it could not allow the prayer to set aside the Act in its entirety, the provisions of the Act should be restricted to games of chance. The court added that games like rummy and poker were games of skill and thus, the provisions of the Act would not be applicable to these games. The court also observed that while the government could regulate the games by restricting the time spent playing the game, setting age-limits etc on both games of skill and chance, it could not totally ban games of skill.

In the present batch of litigation, the companies had sought to quash the Act as being unconstitutional and violative of their fundamental rights. The companies had also sought for an interim stay on the operation of the Act and requested that no coercive steps be taken till the disposal of the petitions. The court had, however, refused to grant an interim stay and noted that since the arguments for interim relief and the final relief were the same, the matter could be heard and decided in finality.

Earlier, Senior Counsel Abhishek Manu Singhvi, representing Gamesrakft Technologies Private Limited and arguing in favor of online rummy had submitted that the courts in the country had repeatedly held that rummy is a game of skill and not that of chance. He argued that just because a game may include chance, it would not make it a game of chance as what had to be looked into was the predominance.

Singhvi also argued that there was a watershed distinction between a game of skill and a game of chance. It was submitted that this watershed distinction could not be abolished by a deeming function of the state. It was also submitted that the state was trying to do something that was not legally permissible to do. He added that Games of skill were per se a distinct class that was differentiated from a game of chance and this distinction had existed for more than 100 years.

Senior Counsel Aryama Sundaram, appearing for All India Gaming Federation, submitted that under Entry 31 of List I, only the Central Government is competent to legislate on wireless communication. He submitted that the central government has already come up with rules under the Information Technology Act that answer all the worries and concerns associated with online gaming. He further submitted that the State is not competent to have parallel legislation on the same.

Sundaram had also submitted that the definitions provided in the Act were vague and would thus lead to arbitrariness. He argued that there could not be penal consequences on subjective satisfaction. He added that as far as a game of skill was concerned, it was protected by Article 19(1)(g) of the Constitution and that the distinction of a game of skill as online or offline was violative of Article 14 of the Constitution.

On the other hand, Senior Counsel Kapil Sibal, appearing for the State, argued that it was the Centre that transgressed into the State’s authority as only the State is empowered to pass laws on betting and gambling. He also argued that even as per precedence, the courts have held that though Rummy is a game of skill if it involves gambling or brought in revenue, it can be regulated. Sibal also submitted that it is a matter of private interest versus public interest and that the court has to decide how to interpret a law that is for protecting families.

Senior Counsel Satish Parasaran and Advocates Deepika Murali, Suhrith Parthasarathy, and Suhaan Mukherjee also appeared for the petitioners. Additional Advocate General Amit Anand Tiwari also appeared for the State.

Citation: 2023 LiveLaw (Mad) 344

Case Title: All India Gaming Federation v State and Others

Case No: WP 13203 of 2023