TN Gaming Ban Ordinance: A missed chance for a progressive online gaming regulation

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After many months of delays, the Tamil Nadu government has finally come up with an Ordinance to ban online rummy, poker and other games for stakes. In less than two years, this is the second time that the government has come up with a law to prohibit online gaming for stakes.

The earlier law enacted by the AIADMK government was quashed as unconstitutional by Madras High Court in August 2021. Referring to a plethora of judgments, the Court held that the enactment imposing a blanket ban on skill gaming for stakes is inconsistent with the decisions of the Courts in the past five decades. “Even the Law Commission’s recommendations stressed on regulation and not prohibition,” the Court observed. This Madras High Court decision is followed by a similar decision by the Karnataka High Court.

With this, it is now clear that it is beyond the constitutional power of the States to enact a blanket ban on online skill gaming for stakes. A blanket ban on online skill gaming fails the test of reasonableness under Article 14 of the Constitution and infringes upon the rights guaranteed under Article 19 of the Constitution. Poker, Rummy, and Fantasy Sports were held to be games of skill.

Facing enormous pressure from the opposition to enact fresh law, the DMK government is aware of the challenges that the law could face before the Courts. This is the reason that the present ordinance details the background for enacting the law in nearly two pages. When the law is challenged, the Stalin government would want to demonstrate the rational nexus of the ban to the evils sought to be eradicated.

Under the ordinance, ‘online gambling’ includes online games of chance for stakes. Games of chance are defined to include a game that involves both an element of chance and an element of skill, a game that involves an element of chance that can be eliminated by superlative skill, and a game that is presented as involving an element of chance. With this wide definition, the government aimed to target skill games like rummy and poker.

Online gambling is prohibited but again the law specifically lists rummy and poker as games prohibited. It is not clear why rummy and poker are singled out from other kinds of gaming for stakes when the intention is a ban on all gaming for stakes. This goes against the established precedents of law.

One of the functions of the Tamil Nadu Online Gaming Authority (to be established under the Ordinance) is requesting the State Government to take appropriate actions under the Information Technology Act, 2000 (IT Act). The IT Act is a central law and the Central Government is the enforcement authority against the majority of the sections (including Section 69-A to block websites). It is not clear how the recommendations of the Gaming Authority vis-a-vis the IT Act will be enforced if State Government has no power to do so.

With the plethora of judgements, the Stalin government may be aware that a blanket ban is prohibited. But this Ordinance again tries to impose a blanket ban which gives scope for Courts to quash the law again.