In a significant ruling, the Madras High Court has upheld the validity of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act 2022. However, the court added a crucial nuance by excluding skill-based games like rummy and poker from the Act’s purview, emphasizing that the legislation would apply only to games of chance.

The bench, comprising Chief Justice SV Gangapurwala and Justice PD Audikesavalu, rendered this decision while partly allowing an application filed by online gaming companies challenging the Act’s constitutionality. The companies had sought to quash the Act, which came into effect on April 21, arguing that it violated their fundamental rights.

The court acknowledged the challenge posed by the Act but stopped short of setting it aside entirely. Instead, it delineated the Act’s applicability, excluding skill-based games from its provisions. This move reflects the court’s nuanced understanding of the gaming landscape, acknowledging the distinction between skill and chance games.

The legal battle saw online gaming companies challenging the Act’s constitutionality and seeking an interim stay on its operation. The court, however, refused interim relief, opting to address both interim and final relief arguments simultaneously, citing their similarity.

Senior Counsel Abhishek Manu Singhvi, representing Gamesrakft Technologies Private Limited, argued fervently in favor of online rummy, asserting that courts in the country consistently recognized it as a game of skill, not chance. He contended that the Act’s provisions should not impinge on skill-based games and urged the court to uphold this crucial distinction.

In a broader legal context, Singhvi emphasized the longstanding legal recognition of the watershed distinction between games of skill and chance, asserting that the state cannot obliterate this distinction through legislative fiat. He argued that the state’s attempt to equate games of skill with games of chance was legally impermissible, challenging the Act’s constitutionality.

Senior Counsel Aryama Sundaram, appearing for the All India Gaming Federation, delved into the legislative competence issue. He argued that under Entry 31 of List I, only the Central Government has the authority to legislate on wireless communication. Sundaram contended that the central government had already framed rules under the Information Technology Act, addressing concerns related to online gaming. He asserted that the state’s parallel legislation on the same subject exceeded its legislative competence.

Sundaram also raised concerns about the Act’s definitions, deeming them vague and likely to result in arbitrariness. He argued against penal consequences based on subjective satisfaction, emphasizing that penalizing games of skill under the Act would violate Article 19(1)(g) of the Constitution, protecting the right to practice any profession.

On the other side, Senior Counsel Kapil Sibal, representing the State, presented a counterargument, asserting that it was the Centre encroaching on the State’s authority. He contended that only the State possesses the legislative power to pass laws on betting and gambling. Sibal cited precedents to highlight that even if a game like rummy involves skill, it can still be regulated if it involves gambling or revenue generation.

Sibal’s argument brought attention to the delicate balance between private interests and public interests, urging the court to interpret the law with a focus on protecting families from the potential harms associated with online gaming.

In its ruling, the Madras High Court demonstrated a nuanced approach, validating the Act with a crucial exception for skill-based games. The court acknowledged the state’s regulatory authority over gaming activities but also recognized the distinct legal status of skill-based games like rummy and poker. This decision reflects an evolving legal perspective on online gaming, where the courts are navigating a complex landscape to strike a balance between regulation and individual freedoms.

As the legal battle continues, this verdict sets a precedent for considering the unique characteristics of skill-based games within the broader framework of online gaming regulation. The court’s decision not only upholds the state’s authority to regulate but also underscores the importance of preserving well-established legal distinctions, especially when it comes to activities involving a combination of skill and chance.

This nuanced ruling from the Madras High Court provides a thoughtful perspective on the intersection of technology, gaming, and legal frameworks, offering insights that could influence future considerations of online gaming regulations in India.

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