Future of Real Money Gaming Uncertain in Telangana as Online Gaming Operators Continue to Fight Legal Battle

The legal hurdles for gaming operators in the country trying to pave a transparent and legally maneuverable path to real money gaming are far from over. While legal crusaders like the Indian Poker Association (IPA) continue their missive against legal roadblocks in casino and gaming sectors in states like Gujarat, online gaming in Telangana faces a legal impasse.

Telangana was one of the biggest markets for online gaming in India, particularly online rummy till June 2017, when issuing two ordinances one after the other, the state government slapped a blanket ban on gaming. Operators offering online rummy were hit the hardest as compared to poker and fantasy sports operators and several of them sought legal intervention.

More than a year has passed since then, and much water has flown under the bridge, with Telangana government bringing in a Bill to bolster the ban on real money gaming and gaming operators continuing their pursuit for a legal solution through writ petitions filed against the government’s hastily rushed-in ordinance and legislation. In absence of a clear judgment from the court, however, the future of gaming in Telangana, and these gaming setups and portals is undoubtedly in doubt.

Three rummy operators, namely Head Infotech (India) Pvt. Ltd &ANO (Ace2Three), Junglee Games India Pvt. Ltd (Junglee Rummy) and Mumbai-based Play Games 24×7 (RummyCircle) Mumbai were among the various gaming portals hit by Telangana government’s move in June 2017 to ban all forms of gaming.

The government issued two ordinances for amending the existing gaming acts and ban online gambling. The ordinances made promoters of these games in the state liable for prosecution under the new law.

The first i.e. Telangana State Gaming (Amendment) Ordinance, 2017 made online betting and gambling illegal while adding a new definition for “cyber space” in the gaming legislation.In an unprecedented move, the state government quickly followed it up with a second amendment ordinance which deleted Section 15 of the Gaming Act of 1974 that exempted ‘games of skill’ from the ambit of gambling.

Faced with a sudden drop in users and the threat of legal prosecution, online gaming companies retaliated by filing writ petitions against the same. In midst of huge political pressure, the Telangana government announced in October 2017 that an amendment Act would be tabled in the state legislative assembly.

Sure enough, the Telangana Gaming (Amendment) Bill, 2017 was passed by the lower house of the legislature on November 13, 2017 and on November 15, the bill was passed by the state legislative council.

Through the amendments, all games, including games of skill that involve money were included under the ambit of gambling and have been made cognizable and non-bailable offences.

In response to this, rummy companies amended their petitions and prayers accordingly.

In the latest, the Hyderabad High Court, after hearing the arguments in four writ petitions filed by the aforementioned companies and their authorized representatives on August 10, scheduled another hearing for August 21. The court’s proceedings on the scheduled date are not known yet.

Till now, the High Court has accorded only interim relief to Head Infotech’s Ace2Three and other Hyderabad-based rummy websites, allowing them to accept players from states other than Telangana to play on their portals. This interim relief had been periodically extended by the courts since last year through one line orders, and the latest order was reportedly on July 30, extending the relief by one month.

On August 10, a two-judge bench of High Court at Hyderabad, Chief Justice TBN Radhakrishnan and Justice V Ramasubramanian heard in part, the case pertaining to legality of online rummy. In their writ pleas, the petitioners challenged the ordinance issued by the government in bringing ‘online rummy’ under the Gaming Act, by amending the provision of Telangana Gaming Act 1974.

Citing the 1967 dated Supreme Court judgement that held rummy to be a game of skill and not just a game of chance, senior counsel, CV Mohan Reddy, appearing for the petitioners argued that online rummy should also be considered a game of skill and that the ordnance infringes upon the rummy companies’ right to free trade and commerce guaranteed under Article 19 (1) (g) of the constitution.

Countering the argument, state representative senior Advocate Harin Raval appearing for Telangana state pointed to the amended provisions of the Telangana Gaming Act, section 2 (A) that bring under its ambit, cyberspace as one of the gaming houses which deals with games of chance.

To this, the petitioners’ counsel said that there was no betting or gambling taking place in online rummy, a statement that the state denied. The state counsel pointed out that there was a growing addiction for online rummy, particularly among youngsters, that was creating financial problems in families.

Notably, prospects of the gaming sector in Gujarat are undergoing a similar legal flux. In December 7, 2017, rejecting petitions seeking approval for poker rooms by IPA secretary KN Suresh and various gaming zones, Justice RH Shukla of Gujarat High Court held that poker is a game of chance and doesn’t involve a substantial degree of skill and thus falls in the definition of gambling. Justice Shukla also ruled out the possibility of granting a license for poker in limited space, as US does for gambling, on the ground that the statute here prohibits gambling and state of Gujarat has a right to make legislation, though the game is permitted in West Bengal, Karnataka and parts of North East.

While a division bench of Gujarat HC will hear an appeal against the said judgment on September 11, in context to Telangana it is clear that unless the law gives a clear judgement on the ongoing tussle, the future of online gaming in the state will continue to hang in the balance.

Related Articles:

1. Gaming Amendment Bill Passed by Telangana’s Legislative Council

2. Telangana Government Passes Ordinance to Ban Online Gaming; Move Likely to be Challenged in Court

3. Telangana Government to Likely Approve Online Gaming Ban Ordinances Into An Act