Tamil Nadu: State govt asserts online gambling act well under legislative competence

Published on:

Responding to the multiple pleas challenging the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, the state government has filed a counter-affidavit through Advocate-General R. Shunmugasundaram.

Pleas were previously filed by All India Gaming Federation (AIGF) and other online gaming firms as the new law prevented the companies to operate their online poker and rummy, calling them games of chance.

The act was put in effect keeping public order, public health and betting and gambling in mind as several cases of people committing suicide after losing money from online rummy were reported throughout several news outlets in the state.

“The object of the Tamil Nadu legislature in enacting the impugned Act was to remedy the public disorder which has resulted from an unchecked spread of online gaming addiction and online gambling in the State,” the government said as per The Hindu.

Mental health is also considered a part of public health, and therefore the act formed an Online Gaming Authority to keep online games in check.

Home Secretary P. Amudha stated that rummy and poker, when played in online format, can be considered as chance-based games instead of skill-based games. Under the act, the state government has the authority to enact rules governing wagering on both skill-based and chance-based games.

Gaming industry claimed the act was not in line with the Information Technology Rules, 2021, to which the government said such debate was “unpersuasive and untenable”. Further, saying that the act and the central intermediary guidelines are capable of operating together.

The Online Gaming Authority is empowered under the Act to propose the State government to take action against online gaming firms that violate the law. Another defence put forward by the State was that if a Central legislation, in essence and substance, pertains to a topic on the State list, then such a law should be regarded as illegal for lack of legislative competence.

In the submission, the state also denied acquisitions of the act violating the right to business under Article 19(1)(g) of the constitution, saying companies cannot claim to be a “citizen of India” in order to claim the fundamental right.

Even for companies qualifying as “citizens”, the state holds the right to impose reasonable restrictions, especially if there was a strong public interest behind such a move. Furthermore, the state reassured that the act was formed by a committee led by Madras High Court’s retired judge K. Chandru who is well aware of the harms caused by unrestricted access to these platforms.

The objective described above cannot be achieved by any means other than regulation or prohibition of gambling activities in the state, according to the government.

“Regulating any entity that operates over the Internet is a complex matter and would involve disproportionate expenditure of finances and manpower, which is not feasible for the State of Tamil Nadu,” it said.

Furthermore, the government also noted that the act in no way plans to overrule any judgement made by the Supreme Court saying, “the impugned Act is a sui generis legislation on online gaming and gambling and there is no authoritative legal pronouncement on the character of any online game as a game of chance or a game of skill”.

Home Secretary P. Amudha said, “The predominance or otherwise of the ‘skill’ element in an online game cannot be measured because the ‘chance’ element in an online game is not a true element of chance. A computer does not use a physical device for generating random outcomes. Computers deploy a software known as Random Number Generator (RNG).”

The government also provided the scale of harm caused by online gaming addiction through the list of all suicides since 2020 due to losing money on online gambling. These included people from various professions.

“The tremendous stakes involved in online gaming business can be gauged from the established fact that several online games providers are offering ‘free bonuses’ worth ₹2,000-₹10,000 to lakhs of players via SMS messages in order to entice them to participate in the games. It can be reasonably assumed that no business would offer incentives on such a scale unless it is confident of being able to recoup such amounts,” it read.