Supreme Court hears Karnataka & Tamil Nadu govts appeal against quashing of online money gaming laws

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A 3-judge bench of the Supreme Court comprising of Justices Aniruddha Bose, Sudhanshu Dhulia and Augustine George Masih on Thursday heard the appeals by governments of Karnataka and Tamil Nadu in relation to quashing of online gaming ban laws by the respective High Courts.

Senior Counsel C. Aryama Sundaram appearing for gaming body AIGF submitted that Tamil Nadu government’s appeal has become infructuous in light of a new law passed by the state government which was once again struck down by the Madras High Court.

Senior Counsel Sajan Poovayya appearing for some online rummy companies also pointed out that new IT Rules have been formulated and union has legislative competence; and that issues of game of skill and game of chance have been settled by several Supreme Court judgments.

Amit Anand Tiwari, Additional Advocate General of Tamil Nadu countered these submissions and said the issue requires detailed consideration and that the question of law has to be decided by the apex court. He further submitted that the Tamil Nadu government is also in the process of filing an SLP against the recent Madras HC judgment striking down portions of the new online gaming law as well. The matter is now expected to be listed after 5 weeks before which the parties are expected to exchange the pleadings.

The decision of the apex court in these matters is crucial as this will conclusively determine the fate of the online skill gaming industry.

In a related development, industry Association E-Gaming Federation (EGF) and money gaming platform A23 have approached the Supreme Court challenging the constitutional validity of certain CGST Act, 2017 provisions and the CGST Rules as they existed before the recent amendments and the retrospective interpretation of 28% rate GST provisions by the department. EGF is already one of the respondents in the pending appeal by the DGGI in the GamesKraft matter which will tentatively be heard this month.