With fantasy gaming and other such ‘online games’ gaining popularity, Telangana was the first state to expressly ban online gaming in the recent past. Tamil Nadu has followed the suit by passing an ordinance titled the Tamil Nadu Gaming and Police Laws (Amendment) Ordinance, 2020 (“Ordinance”) dated 20 November 2020. The Ordinance amends the Tamil Nadu Gaming Act, 1930, the Chennai City Policy Act, 1888, and the Tamil Nadu District Police Act, 1859.
The Reason Behind the Ban
The Madurai bench of the Madras High Court heard public interest litigation concerning the ban of certain online games. The Court had made specific mention of the loss of human lives owing to online gambling and had also stated that it was considering banning online games. This remark was passed specifically owing to multiple cases of suicide that were reported on account of indulgence in online gaming and suffering heavy financial losses.
The Amendment to the Tamil Nadu Gaming Act, 1930 Broken Down
Through the Ordinance, new definitions have been introduced and existing definitions have been amended. The definitions amended/introduced by the Ordinance include: ‘common gaming house’, ‘gaming’ and ‘instruments of gaming’. The critical ‘gamechanger’ seems to be the inclusion of a ban on wagering or betting in cyberspace.
In banning wagering or betting in cyberspace, the amendment appears to completely do away with the need to scrutinize whether an alleged ‘game’ is a ‘game of skill’ or otherwise. This test has been applied by Courts throughout the country time and again. Instead, the Ordinance puts in place a ban on wagering or betting in cyberspace including by playing rummy, poker, or any other game.
The Ordinance states that those found gaming shall be punished with a fine of INR 5,000 and may be sentenced to a six-month long term of imprisonment. Persons that run/keep such gaming houses open shall be punished with a fine of INR 10,000 and may be sentenced to imprisonment for up to two years. The electronic transfer of funds for wagering or betting as well as the distribution of winnings or prizes in the form of money or otherwise has been expressly banned.
Thoughts on the Ban
While the intention behind the ban appears well-founded, that is, to safeguard the interests of citizens against the evils of online gambling, the measures taken appear to lack the sound application of mind. The Ordinance leaves several questions unanswered, for example, manifesting as the clear lack of a definition of ‘wagering’ and ‘betting’.
In the absence of clear definitions and on account of clearly imposing a ban on rummy, poker, and ‘any other game’, the Ordinance seems extremely ambiguous. From a reading of the bare text, the position of the judiciary on ‘games of skill’ also seems categorically cast aside. Several other games played online may now also be brought under the purview of this amendment/Ordinance contrary to the intention of the Ordinance.
The Ordinance may have the right intent, it does not, in its current form, have the right solution. The implementation of the Ordinance may lead to an absurd manifestation where the baby is thrown with the bathwater.
This Article is written by Karthik Jayakumar. Karthik Jayakumar is the founding partner of K Legal, a law firm currently based in Chennai. He graduated from the School of Excellence in Law, Chennai. His practise areas include M&A, private equity, venture capital, start-up and general corporate advisory.
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