On November 11, 2020, the Governor of Tamil Nadu Banwarilal Purohit promulgated an Ordinance of the Tamil Nadu government to “Ban Online Gaming” [which purportedly refers to games involving betting/gambling like ‘Online Rummy’]. On December 7, 2020, the Madras High Court refused to grant an interim stay on the ordinance. So, what is the issue here?
Context
The recent proliferation of online-based fantasy games in the country has alarmed both the central and state governments. Several companies (including Dream11 and MPL) have received widespread attention through their advertisements and have garnered substantial user base within a short span of time.
Betting is illegal in India (although the laws differ from state to state). There is confusion among the public and policy makers regarding the legality of fantasy sports. Since there is not a single unified regulation applicable across the country, some states have banned fantasy sports altogether while some have allowed them to thrive.
The other issue is regarding the ‘games of skill’ versus ‘games of chance’ argument. While games of chance are considered as gambling, the government allows games of skill. While rummy is considered a game of skill, some argue that if the game involves money, it should be considered as gambling. While some states have allowed online rummy, states like Tamil Nadu and Andhra Pradesh have banned such games.
Government’s stance:
The Tamil Nadu government’s press release on the Ordinance noted that several people, especially youngsters, who played online games like ‘Online Rummy’ have lost their money, with some of them committing suicide. It further added that the ban on such games is meant to ‘protect the innocent people from the evils of online gaming’.
The ordinance provides the following [reproduced from the press release]:
- Banning the persons who are wagering or betting in cyber space using computers or any communication device or resource.
- The people who are found gaming will be punished with a fine amount of ₹5,000 and six-months imprisonment.
- The people who open/keep common gaming house will be punished with a fine amount of ₹10,000 and two-years imprisonment.
- Banning “electronic transfer of funds” used for wagering or betting, distributing the winnings, prize money.
- Punishing the persons who are running the company which conducts online gaming by wagering and betting.
Recently, the Andhra Pradesh government also passed a bill that banned online gaming and betting. Apart from the ill-effects of addiction which lead to violent behaviour, the Andhra government opined that online gambling could lead to increase in organised crimes like money laundering and fraud.
Private company’s arguments:
Junglee Games India Private Limited, a Haryana-based company which runs games like ‘Junglee Rummy’, filed a writ petition against Tamil Nadu’s ordinance banning online games like ‘Online Rummy’.
In its affidavit, the company questioned the legal validity of the ordinance. It noted that the Supreme Court and other High Courts across the country had held that rummy was a game of skill and not a game of chance. While the state government allowed playing offline rummy (physically), the company questioned the selective ban on the online format of the game.
The company further stated that there was no betting involved in the game. While the company charged a service fee depending on the stake at the table, it insisted that, “there is no betting, whatsoever, on the outcome of the online rummy games or other skilled games played between the customers.”
Stating that there were several security measures in place to detect cheating or fraud, the company said, “The apprehension that the online game is fraught with cheating and is allegedly played with machines on the other end is totally unfounded… Therefore, the petitioner submits that the criminalisation of legitimate activities, merely on the ground that the same is being conducted online, is highly discriminatory and deserves to be set aside.”
Recommended Reading:
Is there a difference between ‘Online Gaming’ and ‘Online Gambling’? Is the interchangeability of the two phrases affecting genuine video game publishers? Read The Print’s take on the issue here.