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India’s online gaming sector has just got another significant shot in the arm! On Monday, the High Court of Kerala struck down a notification issued by the state government in February to ban online rummy!
The court gave its judgment while concluding the hearing on a petition filed by four online rummy operators – Ace2Three, Junglee Games, RummyCircle, and RummyCulture, against the February notification. Giving his final judgment on the case, Justice TR Ravi said that the notification was arbitrary and violated the right to trade and commerce. It also violated the right to equality, guaranteed under the Indian constitution, the order stated.
The Kerala High Court decision comes hot on the heels of the neighboring Karnataka cabinet approving legislation to ban online gaming. Legal experts have surmised that this move would be challenged in court. The decision also gains significance in the light of the recent ruling by the Madras High Court. Last month, the first bench of the Madras High Court struck down the Tamil Nadu Gaming and Police Laws Amendment Act 2021, asking the Tamil Nadu government to regulate rather than ban online gaming.
Now that a second High Court has made a favorable ruling, the case for creating a regulatory mechanism for the online gaming sector has become stronger than ever.
The Case of Online Rummy in Kerala
The Kerala High Court had, in February 2019, ruled rummy to be a game of skill but added the caveat that if played for stakes, the activity amounted to gambling, making it an offense under the Kerala Gaming Act, 1960. The ruling was challenged by online rummy sites, Ace2Three, Junglee Rummy, and RummyCircle, but the court dismissed their review petitions the same year in October.
In February, the state government indicated that it’s planning to bring in legislation to ban all forms of online gaming. On February 9, the government told the Kerala High Court that the government has proposed to regulate online rummy by issuing a notification under Section 14A of the Kerala Gaming Act, 1960. The Act currently exempts games of skill from its prohibitory provisions.
On behalf of the rummy operators, the court had heard the arguments presented by senior advocates Mukul Rohatgi and Joseph Markos and advocates Santhosh Mathew and Thomas Kuruvilla. They argued how a ban could not be imposed by issuing a mere notification. The petitioners also said that the ban on rummy being played for stakes was contrary to the various High Court and Supreme Court rulings. It violated the operators’ right to trade and commerce guaranteed under Article 19 (1) (g) of the Indian constitution. On the other hand, the state government stated that online rummy for stakes was creating different social problems and encouraging loss of hard-earned savings and suicides.
The court agreed to the operators’ reasoning and observed the government notification was arbitrary and violated the right to trade and commerce and the right to equality underlaid in the constitution.
The Kerala government can now either appeal the decision before a division bench of the High Court or bring in new legislation on online gaming.
A Slow But Favorable Turnaround for Gaming?
In 2020 we witnessed two Indian states starting with Andhra Pradesh and Tamil Nadu, declare a blanket ban on online gaming by bringing in requisite ordnances. Karnataka also hinted that it is looking at the following suit, and earlier this month, the government clarified that it intends to ban all forms of real-money online gaming.
While on the one hand, the Madras High Court struck down the Bill providing for online gaming in Tamil Nadu, the Karnataka government swiftly amended its existing laws to ban online games. The Bill was subsequently approved by the state cabinet.
Surprisingly, Telangana was the first state down South to ban real-money online gaming in 2017. In the wake of recent developments, the state seems to be tilting towards regulation instead of a ban. The government came out with a statement in August that blanket banning was not a solution, and it’s now working on a draft regulation setting the legal undertone for self-regulation of the online gaming sector.