After the Tamil Nadu Gaming Ban Failure, It Is Time for Progressive Regulation


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Legislators in Chennai had earlier adopted the State Government bill banning all online gaming for money and other stakes. The Supreme Court was quick to strike down the ban as arbitrary, outlawing even legal games and businesses. Legal analysts say it is high time to adopt some well-structured regulation for the nation’s fastest-growing entertainment sector.

Courts Back Skill Gaming Industry, Yet Again

In early 2021, the Tamil Nadu legislature adopted an amendment of the 1930 Gaming Act, extending its coverage to online gaming. The ordinance effectively banned all e-games played for real money, stakes, and other prizes, provoking an immediate reaction by online industry associations and trade bodies.

Recently, the Madras High Court struck down the amendment, upholding the constitutional right of businesses to offer skill games, online or elsewhere. Legal experts pointed out that playing for money has never been a precondition for (illegal) gambling. The distinction between skill and chance remains the decisive factor, as repeatedly declared by the Supreme Court and various High Courts.

While States have the right to regulate online casino and betting sites as they see fit, some of the nation’s favourite games like rummy, horse racing and government lotteries have time and again their legitimacy as skill genres. Even TV shows like “Kaun Banega Crorepati” have been challenged in court for promoting gambling, again unsuccessfully.

Pressing Need to Regulate a Huge Market

When economists and legal experts call for sensible regulation of the industry, most argue that the wide target audience and huge size of the online gaming market cannot be overlooked anymore. An undeniable social phenomenon, mobile, and e-gaming have over 400 million active users across Bharat, as per the latest estimates.

KPMG analysts valued the online gaming market at Rs 90 billion, rapidly growing at nearly 45% on an annual basis – faster than any other entertainment or media segment. More importantly, players have shown a propensity to pay for their favorite games, even when they are not the classic gambling type.

About 30% of the industry revenue comes from non-fantasy Real Money Games (RMG), many of which are skill-based. Fantasy and e-sports also have their legal markets, with sports stars promoting online gaming platforms across the nation.

While the booming digital segment is attracting investments and quality startups, many online gaming operators lament the uncertain legal climate. Monetization is flexible, from in-app purchases to monthly subscriptions, prize pools, and non-monetary stakes. Outlawing the entire industry can never be considered proper regulation, as pointed out by the Madras High Court.

Article 19 of the Constitution defends the rights of all digital companies to operate similar online gaming platforms. Real money games like poker, rummy, quiz, and fantasy sports should be able to accept digital transactions and a blanket ban will always remain unrealistic.

Whenever authorities and industry experts agree to work together on the matter, players can expect a balanced set of rules for paid gaming. Nagaland has done much in the field, traditional gambling grounds like Sikkim and Goa can contribute to the national dispute. In the end, a Central-level gaming concept will benefit businesses, players, and the exchequer.


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