Top 3 Developments of 2020: Andhra Pradesh & Tamil Nadu Impose Legal Bans on Real-Money Gaming; Karnataka Tethering on the Edge

It’s almost time to bid goodbye to 2020, and as we approach the last few days of the year, it’s as good a time as any to recap the top three developments for the poker industry.

The biggest news that grabbed everyone’s attention was, of course, the COVID-19 outbreak. Not only did this ‘once-in-a-generation’ virus impact people’s lives, but it also affected businesses, industries, states, and nations. So, while the global pandemic was a significant development of 2020, we will be starting off our first year-end editorial with a roundup of the legal bans that two south Indian states, Andhra Pradesh and Tamil Nadu, implemented. With online poker being a part of the over-arching online gaming sector, these legal bans directly impacted the poker industry – significant enough to make the #3 spot in the top developments for the poker industry in 2020.

While we have witnessed unprecedented growth in online poker, correspondingly, the live poker scene came to an abrupt halt in March 2020 with the country’s COVID-19 lockdown. Online poker was already flourishing for the past few years, but the COVID-induced lockdowns did go a long way in increasing traffic on the virtual felts.

However, the legal bans were a definite downer towards the end of 2020. Telangana was the first south Indian state to impose a legal ban on real-money online games back in 2017. After Andhra Pradesh got the ball rolling in 2020 by banning online gaming in September, Tamil Nadu had also boarded the ‘Ban Real-Money Online Games’ express within a month. Karnataka hasn’t come on board yet, but the train is fast-approaching, and it seems likely that Karnataka will be the next passenger.

As the status-quo now stands, four out of the five south Indian states, i.e., Telangana, Andhra Pradesh, Tamil Nadu, and Kerala, have banned online gaming, with Karnataka tethering on the edge of imposing a ban.

Let us give you a rundown of what has transpired over the past few months.

First Blow: Andhra Pradesh Passed Ordinance; Online Gaming Categorized as Criminal Offence

Telangana’s ban on real-money online gaming in 2017 set the ball rolling for other south Indian states to start mulling over the possibility as well. Although no concrete move was made by any state, every now and then, politicians would bring up the matter, often, as a means to gain support from the masses by portraying the industry in a demeaning light. What started as inconsistent murmurs in Andhra Pradesh eventually manifested itself in the form of the revamped Andhra Pradesh Gaming (Amendment) Ordinance, 2020.

Since July 2019, the Y.S. Jaganmohan Reddy-led state government began seriously considering banning all forms of real-money online gaming. The consideration gained momentum when it received support from the state BJP unit’s vice-president, S. Vishnuvardhan Reddy, in May 2020.

Finally, on September 3, the Andhra Pradesh government announced a ban on all forms of real money online games like fantasy sports, rummy, and poker, claiming that these games were pushing the youth on the wrong path. Taking the same route as Telangana, Andhra Pradesh also criminalized online gaming. The new act added provisions for a six-month prison term for those indulging in real-money online gaming, which would go up to two years of jail time for repeat offenders.

Andhra Pradesh being the seventh-largest state in the country, the online gaming ban dealt a massive blow to the industry.

Second Blow: Tamil Nadu Promulgates Ordinance to Shutdown Online Gaming

If the Telangana ban was a rip in the online gaming industry’s fabric, Andhra Pradesh joining the list was a significant tear. Now that Tamil Nadu has also jumped onto the bandwagon, the industry, at least in the South, seems to be falling apart.

In some ways, you can say that how the situation unfolded in Tamil Nadu was similar to Andhra Pradesh. In July, the Madras High Court had voiced concern that unemployed youth were being lured into addiction by online gaming sites that offer rummy. But instead of issuing an all-out ban, the court suggested that the Tamil Nadu government take measures to pass relevant legislation for regulating them through licensing.

It would have been a landmark move had the Tamil Nadu government heeded the court’s suggestion and worked to find a way to regulate the industry properly. Instead, the government chose the easy way out by baning real-money gaming.

Maybe calling it the easy way out is a bit harsh. Around the time Tamil Nadu was contemplating what action to take, a series of events transpired. A PIL was filed in the Madras High Court, bringing attention to the increasing incidents of suicide by players who had lost significant sums of money on gaming apps. After that, the court issued notices to Indian cricket team captain Virat Kohli and BCCI Chief, and former Indian cricket team captain Sourav Ganguly for endorsing fantasy sports sites. The court even pulled up The Online Rummy Federation (TORF), an industry for online rummy.

In another petition filed by one S. Muthukumar, the court issued notice to rummy company PlayGames24x7, central and state government bodies.

The sudden wave of PILs filed against online gaming in the state possibly acted as a catalyst in pushing the political machinery to move ahead with the ban.

On November 21, the Tamil Nadu Governor Banwarilal Purohit promulgated an ordinance banning online gaming, following the state government’s decision. Almost copy-pasting the guidelines followed by Telangana and Andhra Pradesh, Tamil Nadu turned real-money online gaming into a criminal offense. Taking the restriction’s a step further, the ordinance also included bans on electronic transfer of funds used for wagering and betting, distributing the winnings, prize money, etc. This, in turn, led to online gaming platform Junglee Games India Private Limited filing a writ petition challenging the constitutional validity of the ordinance. The petitioners urged the court to stay the ordinance till the disposal of their case. However, a third Division Bench of Justices R. Subbiah and C. Saravanan, on December 7, denied the request for an interim stay on the real-money gambling ban.

With the ordinance in place, all forms of real-money gaming, including poker, rummy, and fantasy sports, are legally prohibited in Tamil Nadu.

Is a Third Blow Coming? Will Karnataka be in Final Nail in the Coffin for Online Gaming in South India?

Currently, real-money gaming is allowed in Karnataka. But the question is, how long will that last?

The state has a chequered history when it comes to real-money gaming, especially poker. In 2013, in a landmark judgment in the Indian Poker Association (IPA) vs. State of Karnataka case, the Karnataka High Court had ruled that if played as a game of skill, poker can be permitted in recreational clubs and doesn’t require a license for the same. Seven years later, it looks like the state may well be on its way to ban online games legally.

Just around the time when Tamil Nadu promulgated the ordinance to ban real-money online games, Karnataka Home Minister Basavaraj Bommai disclosed the state government’s intention to follow in the footsteps of the Tamil Nadu government.

In early December, a PIL was filed by Davanagere resident Sharada D.R., stating the urgent need for regulating online gambling and online games. Subsequently, a division bench comprising of Chief Justice Abhay Shreeniwas Oka and Justice Vishwajit Shetty of the Karnataka High Court issued a notice to the State Government asking them to respond to the PIL. The matter is scheduled for hearing on January 12, 2021.

With Telangana, Andhra Pradesh, Tamil Nadu, and Kerala already on the anti-online gaming list, it is likely that Karnataka will follow suit. However, since Karnataka is the largest state in south India, a ban on real-money gaming will undoubtedly be the final straw that will break the camel’s back.

Real-Money Gaming in India: Present Status

Besides the four southern Indian states that have prohibited online gaming, Gujrat is also among those states that do not favor the industry. However, the legality of online poker is sub judice in the western state.

So, where does that leave the online gaming industry? Well, it’s not exactly all bad. True, the south Indian states turning away from real-money gaming is a big blow, but India is a big country, and some states do legally permit the industry to function. Additionally, given that online gaming is a state subject, if a state hasn’t specifically disallowed it, then the industry is considered legal.

Under the Nagaland Prohibition of Gambling and Promotion & Regulation of Online Games of Skill Act and Rules, 2016, aka the Nagaland Act, the government has issued online skill game licenses to several online operators.

Online gambling that includes online poker is legal in Sikkim under the Sikkim Online Gaming (Regulation) Rules 2009.

In West Bengal, the West Bengal Gambling and Prize Competitions Act, 1957, section 2 (1) (b) excludes games like poker, rummy, bridge, and nap, from the ambit of gambling.

So, safe to say, 2020 hasn’t been the best year in terms of legalization of online gaming, but there is still scope for the sector to prosper in the country. All we can do is hope that 2021 turns out to be better on this front.