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On Monday afternoon, in a swift turn of events, Governor RN Ravi granted his long-pending assent to the Tamil Nadu Prohibition of Online Gambling & Regulation of Online Games Bill 2022, which had been sent to him by the state assembly for the second time. This move comes after the Assembly, led by the DMK government, passed a new resolution against the Governor, alleging he was not approving Bills passed by the Assembly.
The Bill, which aims to ban all real-money online gaming in Tamil Nadu, was unanimously passed by the Assembly on March 23 and sent to the Governor for approval. This development ends the uncertainty surrounding the Bill’s fate and clarifies the state’s stern stance against online gambling. The confirmation of the Governor’s assent came from sources within the Tamil Nadu Raj Bhavan, ending the speculations and debates surrounding the issue.
With the Governor clearing the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Bill, a gazette notification will follow soon.
Online gaming and playing games of chance with money or stakes, including rummy and poker, is now prohibited in Tamil Nadu. Under the Bill, offenders face imprisonment of up to 3 months, a fine of up to ₹5,000, or both. Those promoting or inducing online gambling can face imprisonment of up to 1 year, a fine of up to ₹5 Lakhs, or both. Providers of such services may face imprisonment of up to 3 years, a fine of up to ₹10 Lakhs, or both.
Following the passing of the Bill, several real-money online gaming platforms, such as Spartan Poker and MPL Poker, have stopped accepting players from Tamil Nadu, with other operators expected to follow suit.
This is the second time the state government has passed a bill prohibiting real-money online gaming. The previous attempt, Tamil Nadu Gaming and Police Laws (Amendment) Act 2021, was struck down by the Madras High Court in August 2021. The state government filed an appeal in Supreme Court, which is currently sub judice.
The Tamil Nadu government has taken a firm stance against online gaming, stating the ban will not be revoked despite the recent amendments to the IT rules notified by the Centre last week.
On Thursday, the Centre notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules 2023, which added provisions to the existing IT Rules of 2021. These additional portions provide a regulatory framework for online gaming and misinformation.
Online Gaming Ban 2.0
Last year, the DMK-led state government passed a Bill and sent it to Governor Ravi for approval. However, after four months, the Governor returned the Bill to the Assembly, questioning the state’s authority to pass such a bill.
The Bill prohibits any online game supplier from offering online gambling services, permitting any online gaming involving cash or other risks, or allowing any online game that violates the rules.
The Bill was passed on October 19, 2022, and sent for the Governor’s approval on October 26. On November 23, the Governor requested clarification, which was provided. However, 131 days later, on March 6, the Bill was returned by Ravi, citing concerns about the constitutional validity of the law.
The Tamil Nadu Prohibition of Online Gambling & Regulation of Online Games Bill 2022 is the second ordinance passed by the state to ban online gaming. The state government had previously introduced and passed the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021 in February 2021.
Following a hard-fought legal battle, on August 3, 2021, the Madras High Court struck down the ban. However, the next day, State Law Minister S. Regupathy reiterated that the government was adamant about banning online games in the public interest. In November 2021, the state approached the Supreme Court to overturn the Madras High Court order.
The fresh Bill comes when the Supreme Court is yet to pass judgment on the appeal filed by the Tamil Nadu government challenging the Madras High Court’s judgment that struck down the state’s previous attempt at banning online games like rummy and poker played in cyberspace with stakes.
Mounting Pressure Against the Governor
The Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Bill was introduced by Chief Minister M K Stalin, who expressed his sadness over the loss of lives due to online gambling.
When the Bill was returned by Governor Ravi, Speaker M Appavu read out a letter stating that the Assembly lacked legislative competence and the Bill contradicted judicial pronouncements. Senior advocate Arvind Datar claimed that the Governor had a duty to give his assent to the Bill passed by the Assembly and should have done so initially.
Chief Minister Stalin informed the Assembly that 41 people had died by suicide after losing money excessively in online gambling. He referred to Sureshkumar, a young man who committed suicide after losing ₹17 Lakhs playing online rummy, and another person who also took his life after leaving a similar suicide note. Stalin stated that it was the government’s responsibility to prevent such tragedies.
The government established a panel led by a retired Madras High Court judge, Justice K Chandru, to advise on drafting a new law to prohibit online gambling, and the committee presented its report.
Justice K Chandru’s Views
The head of Tamil Nadu’s online gaming panel, retired Madras High Court judge Justice K Chandru, echoed the government`s views on a complete ban on online gaming in the state, despite recent amendments to the IT rules.
Chandru believes that regulation will not be effective in curbing the adverse effects of online gaming and that a blanket ban is the only solution. He stated, “These rules do not change Tamil Nadu’s stance on online gaming. We don’t see any other way out except banning. Tamil Nadu will follow its own legislation.”
Chandru’s position has set the stage for a potential legal clash between the Tamil Nadu and central governments.
Chandru was previously appointed head of a committee to promulgate an ordinance on online rummy in June 2022. The committee submitted a 71-page report stating that no skill is involved in any online games, and they invariably lead to players getting addicted to the games and, over time, getting into debt. It ruled out the possibility of regulating the games, underlining that it was impossible.
Online Gaming Industry Reacts
With a ban on all forms of real-money gaming imminent, many online gaming intermediaries and gaming operators will likely approach the courts to challenge the ban, which could create a significant legal precedent.
Sharing a statement on the issue, Roland Landers, CEO of the All India Gaming Federation (AIGF), said, “The Tamil Nadu government has passed a law that will result in banning most online games of skill, including rummy and poker. What this law, in effect, does is treat and conflates games of skill as gambling and games of chance. The law also completely misunderstands technology and prohibits random number generators, which are an integral part of fairness for online gaming. This is disappointing as it disregards the 6 decades of established legal jurisprudence and also the recent judgment of the Madras HC, which struck down a similar law. The Central Government has anyway notified the online games rules, and as we have said, the Central Government has the rightful mandate under the Indian Constitution to regulate online gaming.
As the apex industry body for online gaming, we at the All India Gaming Federation have been engaging with the Tamil Nadu government to understand their concerns and have also made them aware of the proliferation of offshore gambling websites and apps which flourish when constitutionally protected India apps are banned, as was also seen during the previous unconstitutional ban by the state government.
We had provided various consumer protection and other measures which stop short of an outright ban. In such a scenario, this is unfortunate. What is also surprising is that the State government has already appealed the judgment of Madras HC, and the SC had recently issued notices last year. Instead of waiting for the SC judgment and, in the meantime, respecting the categorical decision by their own HC, they seem to have taken another unconstitutional decision that will eventually only benefit online gambling operators.
As the oldest and largest industry body, representing the most number of Indian MSME start-ups, we will challenge the constitutionality of the law once the effective date is notified and have full faith that our judicial system will uphold the fundamental rights of the gaming platforms and their users.”
This is a developing story. Keep following PokerGuru for more updates!
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