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The past few days have been a whirlwind for India’s online gaming industry. Hearing the writ petitions filed by online rummy operators challenging the online gaming ban in Tamil Nadu, the first bench of the Madras High Court comprising Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy expressed their criticism for the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021. On August 3, the court finally struck down the law in a landmark 93-page order.
While this was a moment to rejoice for the online gaming sector, a day later, the Tamil Nadu government revealed its intention to not pay heed to the Madras High Court’s suggestion to regulate online gaming. Instead, the state government announced its intentions of tabling a new law that would ban online gaming while following due procedures and specifying valid reasons to avoid a legal challenge in the future.
Jay Sayta, an expert on gambling laws and a technology lawyer, had a front-row seat to everything that unfolded in this historic case. He was one of the empaneled counsels who appeared and made submissions on behalf of one of the petitioners in the matter. The B.A. LL.B. (Hons.) graduate from the West Bengal National University of Juridical Sciences (NUJS) Kolkata is a known name in the poker industry. The founder of the now-defunct Glaws.in (the website was later sold and merged with Cricket Prediction), a website monitoring gambling, betting, and lottery laws, Sayta has written extensively on gambling and betting laws for various online and offline publications and academic journals. He is currently the Editorial Advisor at G2G.news (Gateway to Gaming), a news media platform catering to gaming, poker, and esports industries.
PokerGuru reached out to the ex-Xaverian to break down the implications of the Madras High Court’s judgment on the Indian online gaming sector and what future developments can be expected to unfurl. You can watch the complete interview below or read the excerpts that follow.
Madras High Court strikes down the Tamil Nadu online gaming ban. What does this mean?
Before we get to the implications of the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021 getting struck down, we first need to understand what the law entailed.
Sayta explains what the Amendment Act that the Tamil Nadu government enacted in February encompassed, “What the Tamil Nadu government had done was that in November (2020) they had come up with an ordinance which banned, specifically, two games, i.e., rummy and poker. When they were played in cyberspace, these games were banned for a bet or wager or any other kind of stakes. So, it banned all real-money rummy and poker operations. Then in February (2021), they converted the ordinance into an Act passed by the state legislature. In fact, the Act went one step further and banned all kinds of skill-based online games, even apart from poker and rummy, even chess and tennis. So, for example, if I wager with someone on tennis or pool or badminton, even that was banned. More particularly in cyberspace, but even in an offline common gaming house. Even offline, if I played, then I would be susceptible to criminal punishment, including jail for playing badminton and wagering on it.”
Sayta elucidated that the Madras High Court viewed the stringent restrictions of the Act to be absurd and decided to declare it invalid. Hence, the current status of the online gaming industry in Tamil Nadu is as it was before the ordinance of November 2020.
“This was where the Madras High Court felt that the law is more absurd if it is retained. So, they struck down the entire law. Basically, summing it up, we are in a situation before February or even November, the law as it stands as what was there before. So, before November 2020, poker, rummy, and other online gaming sites were operating in the state of Tamil Nadu and were accepting players from the state of Tamil Nadu. So, as of August 3, afternoon around 2:30, when the judgment was pronounced in open court, we are back to the status quo and even better because of certain remakes and observations made in the judgment. Players can now play again from Tamil Nadu without any fear of criminal prosecution. Operators can start operating in the state without any fear of police or other action.”
What happened in the court proceedings?
Sayta shared his experience of appearing in the court proceedings. “This was the first time I was arguing in court. So, it was my first experience. Many senior counsels argued before me, and I was actually a tailender in this litigation. I came in for about 20 to 30 minutes. Dr. Abhishek Manu Singhvi started the arguments, then it went on to AK Ganguli, Mohan Parasher, C. Aryama Sundaram, then me, and finally, P.S. Raman. So, a total of six of us were there. All eminent and senior counsel, except me. I was the only one who was not a senior counsel who was arguing.”
He discussed the grounds on which the online gaming companies had filed their writ petitions challenging the law. “All our arguments were on two parts. State governments do not have the power to bring laws on online rummy, poker, or other skill games because they are outside the purview of gambling and betting. State governments do not have the power to legislate on this topic under the ambit of gambling and betting. Second, as it stands today, this law violates the fundamental rights of the companies operating and the players located in the state of Tamil Nadu. Since the companies were the ones who had filed the petition and approached the court, it was mainly from the point of the company’s fundamental rights that the case was argued on. More particularly, two fundamental rights. One is the right to trade and commerce guaranteed under part three of the Constitution under Article 19 (1)(g). The second was the right to equality which states that there will be no arbitrary action without any rationale by the government.”
Challenging the ban on online gaming: How does it affect the legality of online games in other states?
When asked how the Madras High Court judgment could impact the legality of online gaming in other states where they are presently banned, Sayta clarified, “This judgment is limited only to the state of Tamil Nadu since the Madras High Court only has jurisdiction over Tamil Nadu and Pondicherry. However, having said that, this judgment itself carries a lot of weight and value. We call this persuasive value which means that it will value other high courts when the matter is brought before them. To sum up, in similar matters, petitions filed by almost the same companies are pending in Telangana and Andhra Pradesh, where the matters will be heard separately. This judgment will then be placed on record and relied upon when arguing the matter over there.”
Sayta further explained that the judgment will add weightage to any petition filed by individuals or companies against online gaming bans in other states. It will help other high courts reach their determinations on the issues. While the courts may still conclude other than what the Madras High Court observed, Sayta still believes that the judgment will be a considerable advantage when these matters come up in the different high courts.
Tamil Nadu government doubles down by indicating a new law to ban online gaming is on the horizon. Can online gaming be banned even after the recent Madras High Court judgment?
Despite the Madras High Court suggesting the state government consider regulating the real-money online gaming sector instead of imposing an all-out blanket ban, the State Law Minister, on August 4, alluded to the government’s intention to bring about another law once again ban online gaming.
Discussing the possibility of such a law being put forth by the Tamil Nadu government, Sayta said, “The Madras High Court in its judgment towards the end said that the state government can come up with another well-drafted law which is not vague, arbitrary and is reasonable and rational, to safeguard the interest of the public and regulate the activity. So, the Madras High Court has left it open for the state government to come up with a law to regulate. They have said that you cannot ban these activities altogether, particularly rummy, poker, and other skill-based games. So, it would remain to be seen in what form the government brings out a new law. If they bring out a complete ban again, I am sure it will be challenged in the Madras High Court. I don’t think the court will take a favorable view when they have once already said you cannot ban the games. So, it will be difficult for the Tamil Nadu government to ban online gaming outright.”
Madras High Court judgment acknowledges poker as a game of skill. Is this a step towards the legalization of poker in India?
While rummy has been recognized as a game of skill by the Supreme Court of India, poker is yet to receive the same recognition. However, Sayta mentioned how the Madras High Court’s judgment acknowledged poker as a game of skill for the first time.
“The All India Gaming Federation (AIGF) also had filed a petition, focussing more on the game of poker because AIGF is a self-regulatory body for poker, as well as other games. The word ‘poker’ was mentioned in the law. Banning the game of poker. They had petitioned that poker is also a game of skill and should not be banned. So, the Madras High Court researched the game of poker. It understood how the game is played. In the judgment, it mentioned that rummy and poker both are games of skill. Though rummy has a direct Supreme Court judgment classifying it as a game of skill, poker does not. But the Law Commission, in one of its reports, has mentioned poker as a game of skill. Certain U.S. judgments and other case laws from abroad had mentioned poker as a game of skill. So, Madras High Court has mentioned all of this in its judgment. And for the first time, any high court in India has gone into detailed analysis on the game of poker and ruled it as a game of skill at the same level as rummy.”
With crusaders like Jay Sayta, we can hope the sun will shine through for all who love and play the game of poker.