Vikram Jeet Singh and Prashant Daga
A new court ruling in India has held that online ‘games of skill’ such as rummy and poker are legal, and has defended the fundamental rights of individuals to practice a trade comprising games of skill.
Earlier this year the Government of Tamil Nadu had passed the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 (“Amendment”) amending the Tamil Nadu Gaming Act, 1930 (“Act”), prohibiting all forms of online gaming (games of skill and games of chance) in the state. This law (accessible here) removed the exemption usually accorded to games of skill from being penalised when played for wager, bet, money or other stakes. This Amendment came in on the heels of numerous similar laws in other Indian states.
This Amendment was challenged on the grounds that it was unconstitutional, and on August 3, 2021, the Madras High Court (“Madras HC”) in the matter of Junglee Games India Pvt. Ltd. & Anr. v The State of Tamil Nadu & Ors, struck it down in its entirety.
A copy of the Madras HC’s judgement can be accessed here.
Key takeaways from the Judgement:
Rummy and Poker as games of skill: The Court observed that “there appears to be little doubt” that rummy and poker are games of skill as they involve considerable memory, working out of percentages, the ability to follow the cards on the table and constantly adjusting to the changing possibilities of the unseen cards. Poker (in the words of the Court) has not been recognised as a game of skill under any decisions of Indian Court, but the foregoing observation was made on the basis of the Indian Law Commission’s 276th Report acknowledging Poker as a game of skill.
Virtual Games can be Games of Skill too: In reference to playing games in the virtual mode, the Court noted that there was no difference between physical and online formats for games such as scrabble and chess. As such, the court ruling suggests that there is no automatic assumption that a game played online loses its element of skill.
Violation of fundamental rights: Article 19(1)(g) of the Constitution grants citizens of India the right to practice any trade, profession or occupation, subject to reasonable restrictions in the interest of the general public. The Court held that the Amendment’s wide and disproportionate prohibition would deprive individuals from exploiting their skills and only reasonable restrictions that do not completely curb their rights may be permissible. This view of the Court was supported by Supreme Court judgements that have held games of skill separate from games of chance and as protected business activities under Article 19(1)(g).
Disproportionate Restrictions on Gaming: Restrictions on fundamental rights should conform to the rule of proportionality, i.e., measures to be in accordance with the intent of the Act. The Act was enacted with a view to punish wagering and betting on games of chance and exempt the games of skill. The Amendment by its blanket prohibition was in contraire to the Act and Supreme Court judgements distinguishing between games of skill and games of chance. Accordingly, it was held that Amending Act in its application to the Act was disproportionate to the objects that it sets out to achieve and the Amendments to the Act were stuck down as ultra vires in its entirety.
What this means for you: Multiple Indian states (Andhra Pradesh, Rajasthan, Kerala etc.) have in the past year taken steps towards banning online games. The Madras HC’s decision may lead to a reexamination of any blanket prohibitions on games of skill. The Court’s requirement to justify such impositions may force states to opt for a more accommodative approach for games of skill, at least. An important caveat to note is that the Madras HC commented on the legality of online games likely in passing, and that its ruling concentrated examining on a law that imposed a blanket ban. While this serves as an indication that Indian courts may view online games of skill favorably, it remains to be seen what views other High Courts adopt, and if this ruling is appealed.
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