The Madras High Court has rejected the plea for interim relief filed by online gaming companies and the All India Gaming Federation (AIGF) challenging the constitutionality of the Tamil Nadu government’s law that banned online gambling and gaming. The court’s decision means that the ban on online gaming in the state remains in effect.
The Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022, was passed by the South Indian state to prohibit online gaming activities. The AIGF and several online gaming companies, including Gameskraft, Junglee Games, Head Digital Works, and Play Games 24×7, had challenged the law in the High Court.
The bench of Chief Justice SV Gangapurwala and Justice PD Audikesavalu stated that they would prefer to hear the batch of writ petitions for a final hearing rather than granting interim relief, as the arguments would be similar in both cases.
The petitions challenge the ban on online gambling imposed by the Tamil Nadu government and the classification of online rummy and poker as games of chance, despite the industry arguing that they involve skills.
Representing the petitioners, Abhishek Manu Singhvi and Mukul Rastogi referred to the jurisprudence on games of skill and the issue of legislative competence. Rastogi argued that the new law is unconstitutional and contradicts various judgments of the Supreme Court and High Courts. Singhvi highlighted that three High Court judgments have recently struck down bans on online rummy imposed by the governments of Karnataka, Tamil Nadu, and Kerala.
The petitioners contended that rummy and poker are well-established as games of skill and cannot be completely banned in the manner sought by the Tamil Nadu government.
Kapil Sibal, representing the Tamil Nadu government, argued that the same points were already presented before a division bench and were being reiterated.
The court has scheduled the matter for a hearing on July 13, 2023, allowing the petitioners to present their arguments for interim relief. Sibal will respond to these submissions on behalf of the Tamil Nadu government on July 20 or a later date convenient for both parties.
It’s worth noting that while there is no clear consensus on the classification of games as chance or skill, the finance ministry is considering categorizing online games and imposing a differential rate of Goods and Services Tax (GST) based on this classification. The Finance Bill 2023 introduced new sections related to taxation on winnings from online games, indicating the government’s focus on regulating this sector.
