[Authors: Atish Chakraborty, Academic Fellow at the West Bengal National University of Juridical Sciences, Kolkata; Ishaan Vohra, Law Student at the West Bengal National University of Juridical Sciences, Kolkata]
The online gaming industry in India has seen humongous growth over the last five years and its acceptance especially amongst the youth is evidence to the fact that it is here to stay. With the rising popularity of the industry, the Indian Olympic Association’s recognition of online gaming as a medal event in the Asian Games 2022 is a testimony to the fact that online gaming is no longer a leisure activity and is emerging as a sector that is capable of generating professional athletes.
Like any sunrise sector, the regulation(s) pertaining to online gaming are constantly in a state of flux. The Tamil Nadu government pursuant to the striking down of the Tamil Nadu (Gaming and Police Laws (Amendment) Act, 2021 by the Madras High Court in the case of Junglee Games, formulated a five member committee under the leadership of Justice K. Chandru, a former judge of the Madras High Court. The committee was tasked by the government to implore the adverse effects of online games having stakes as well as to formulate guidelines to regulate online gambling.
Based on the recommendations of the committee, the Tamil Nadu government promulgated an ordinance, namely Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022 on October 01, 2022. The ordinance, inter-alia, brought within its ambit online rummy and poker as games of chance. As a result, the already set distinction between games of skill and games of chance was blurred. Further, this was followed by the introduction of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Bill, 2022 which culminated in the enactment of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 on April 07,2023.
The Act aimed at addressing the increasing addiction to online gaming since it was contended that it led to people incurring unsustainable debts as well as resulting in rampant suicides. Further, it was stated that the existing jurisprudence on game of skill versus game of chance is inadequate to deal with issues pertaining to online gambling and that the Act would endeavor to establish an authority, namely the Tamil Nadu Online Gaming Authority. The Act went on to define ‘game of chance’ in respect of online games as any game where chance dominates over the element of skill, a game containing an element of chance that can be eliminated only by a superlative skill, a game containing an element of chance or where cards, dice, wheel etc., is used to generate a random outcome.
Additionally, the Act prohibited all forms of advertisements that tend to induce a person to play any game for money or any other stake either involving an online game of chance like rummy or poker or involving online gambling. The banks and other financial institutions too were prohibited from undertaking any transactions that involved payment towards online games of chance like rummy and poker and online gambling. The Act categorically introduced the system of a mandatory certificate of registration for all local online games providers and required them to apply for a registration with the Tamil Nadu Online Gaming Authority. For the non-local providers, it was made mandatory that they were in compliance with the Act and geo-blocked rummy and poker offerings on their respective platforms. The Act also went on to introduce offences and penalties for local online game providers indulging in online gambling/playing an online game of chance for money or other stakes, advertising, providing an online gambling service or any online game of chance for money or other stakes, It also made non-local online games providers liable for failure to comply with geo-blocking requirements and providing online gambling or online game of chance for money or other stakes.
Ever since this Act was conceived as an ordinance, it witnessed a tussle between the government and online gaming operators and was finally put to a constitutional validity test through a batch of petitions filed before the High Court of Judicature at Madras. These petitions had challenged the constitutional validity of the Act as it infringed their fundamental rights under Article 14, 19 and 21.
However, the Court did not completely strike down the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022. It categorically went on to rely on the settled jurisprudence and upheld that both rummy and poker are games of skill satisfying the predominance test and merely providing these games in an online form cannot change their nature in totality.
As a result, the Court held that merely because rummy or poker is now played in an online format, it cannot be barred based on a flawed logic while permitting the traditional way of playing both these games and regarding them as games of skill as enunciated by the Courts; and set aside the schedules which included rummy and poker as games of chance. This has been further corroborated by a study undertaken by Prof. Tapan K. Gandhi of IIT Delhi, which has observed that there can exist no difference between offline and online formats of playing poker or rummy. Hence, there being a dominance of skill elements present in these games it cannot be distinguished to be a game of chance based on a mere change in the medium of playing such games.
Further, the Court disregarded the argument about employment of artificial intelligence bots, which the state claimed would introduce the chance factor. However, the Court observed that separate reasonable regulations could be introduced in order to govern and regulate playing of games of skill like age, duration for which a person could reasonably play such games or monetary thresholds to deter people incurring unsustainable debts as well rampant suicides which were put forth as some of the concerns by the state in furtherance of the Information Technology (Amendment) Rules, 2023.
The judgment in our opinion is definitely one that marks a watershed moment for the online gaming industry and upholds the jurisprudence that has stood the test of time over the last six decades. Further, any such blanket ban has time and again been observed to be one that is ultra vires the Indian Constitution. Moreover, this judgment is set to go a long way in ensuring an ease of doing business in the online gaming sector. We opine that such a position will have a humongous contribution in promoting online skill games as well as towards safeguarding the rights of people by keeping a provision that will allow the state to bring in regulations from being addicted to unreasonably losing out huge sums of money by partaking in such activities.
*For any query, feedback, or discussion, the Authors can be contacted at [atishchakraborty@nujs.edu & ishaan220086@nujs.edu]
*NOTE- The opinions and views expressed in this article are that of the Author(s) and not of SLPRR- the expressed opinions do not, in any way whatsoever, reflect the views of any third party, including any institution/organisation that the Author(s) is/are currently associated to or was/were associated to in the past. Furthermore, the expressions are solely for informational and educational purposes, and must not be deemed to constitute any kind of advice. The hyperlinks in this blog might take you to webpages operated by third parties- SLPRR does not guarantee or endorse the accuracy or reliability of any information, data, opinions, advice, statements, etc. on these webpages.
PREFERRED CITATION: Atish Chakraborty, Ishaan Vohra, ‘Determining the Contours of Skill & Chance: An Exploration of Online Rummy & Poker‘ SPORTS LAW REVIEW INDIA, available at <https://sportslawreviewindia.blog/?p=3770(opens in a new tab)> 12 January 2024.
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