In a huge reprieve for the online skill-gaming industry, a single-judge bench of the Kerala High Court quashed an amendment to a notification issued by the Kerala government under Section 14A of the Kerala Gaming Act, 1960 banning online rummy. The judgment noted that the notification was arbitrary and violative of the right to trade and commerce guaranteed under Article 19(1)(g) of the Constitution and the right to equality guaranteed under Article 14 of the Constitution.
Justice TR Ravi of the Kerala High Court pronounced the judgment today, almost two months after all arguments in the matter were concluded and the writ petitions filed by four online rummy companies were reserved for judgment.
It may be remembered that on 23rd February 2021 the Kerala government had issued a notification clarifying that online rummy when played for stakes does not enjoy exemption from the general prohibition of gaming and gambling granted under Section 14A of the Kerala Gaming Act, 1960, and the notification issued thereunder in 1976.
Senior Advocates Mukul Rohatgi and Joseph Markos and Advocates Santhosh Mathew and Thomas Kuruvilla appearing on behalf of four online rummy companies Head Digital Works Private Limited (Ace2Three), Junglee Games India Private Limited (Junglee Rummy), Play Games24x7 Private Limited (RummyCircle), and Gameskraft Technologies Private Limited (RummyCulture) had argued that the state government could not ban rummy, which was a game of skill through a mere notification under Section 14A of the Kerala Gaming Act, 1960, and that the ban on online rummy while allowing physical rummy was arbitrary in nature.
They further contended that the ban on online rummy played for stakes, which was a recognized game involving skill goes against various Supreme Court and High Court rulings. They further argued that the notification, which gives the state government power to clarify the list of skill-based games, instead of bans online rummy, thereby violating their right to trade and commerce guaranteed under Article 19(1)(g) of the Constitution.
State government advocate N. Manoj Kumar on the other hand that playing online rummy for stakes was causing various social problems, including suicides and loss of hard-earned savings. He further stated that a division bench of the Kerala High Court had ruled in K Ramchandran v. The Circle Inspector of Police in the year 2019 that rummy played for stakes would amount to gambling and be illegal. Interestingly, the Single Judge today considered the judgment in the K Ramachandran case, as per incuriam and therefore not binding.
He further brought to the attention of the court that a review petition filed by three online rummy companies against the order was also rejected by an order of the division bench of the High Court.
The decision of the Kerala High Court comes as a shot in the arm for the online real money gaming industry, which also received a positive order from the Madras High Court [2021 SCC OnLine Mad. 2767] last month that struck down a law passed by the Tamil Nadu government banning all kinds of online games, including skill-based games like poker and rummy, played for stakes. The Kerala High Court also referred to the recent Madras High Court judgment.
“I hold that Ext.P6 notification is in effect a prohibition of Online Rummy played for stakes and not a reasonable restriction under Article 19(6) of the Constitution of India,” the judgment read. The Court relied on a Supreme Court precedent concerning “rummy” to hold “online rummy” as a game of skill.
The Kerala government can either chose to appeal against this decision before the division bench of the High Court or introduce new legislation to deal with online gaming and rummy provided such a law is not violative of articles 14 and 19 of the Constitution of India. In a similar case, the Tamil Nadu government had decided to file an appeal before the Supreme Court.
The gaming industry is also planning to challenge a similar law introduced by the Karnataka government (which is yet to be assented by the Governor) banning skill-based online games involving wagering or betting.