The following is the full text of the state legislative brief regarding The Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022, as prepared by PRS Legislative Research on October 17, 2022.
Key Features
- The Ordinance prohibits online gambling and online games of chance played for money or other stakes, specifically including Rummy and Poker.
- It establishes the Tamil Nadu Online Gaming Authority to regulate providers, identify games of chance, and recommend their inclusion in the schedule of prohibited games.
- Non-local game providers (based outside Tamil Nadu) must follow specific due diligence or restrict access for people within the state.
Key Issues and Analysis
- Banning Games of Skill: Some criteria for prohibiting games of chance may inadvertently ban online games of skill. Notably, the Ordinance bans Rummy and Poker, which the Supreme Court has previously recognized as games of skill.
- Fundamental Rights: The Authority’s power to impose time and monetary restrictions on adults playing online games may violate the right to freedom of expression and the right to life.
- Jurisdiction and Consistency: The state may lack the jurisdiction to regulate providers based outside Tamil Nadu serving customers outside the state. Additionally, the Ordinance regulates certain games differently when played online versus physically.
PART A: HIGHLIGHTS OF THE ORDINANCE
Context
In 2021, Tamil Nadu attempted to prohibit all games played for stakes through an amendment to its 1930 Gaming and Police Laws Act, aiming to prevent addiction and suicides. However, the Madras High Court struck this down as arbitrary and excessive. This 2022 Ordinance was subsequently promulgated on October 3, 2022, following recommendations from a committee chaired by Retd. Justice K. Chandru.
Key Provisions
- Prohibition of Online Gambling: Defined as wagering or betting on online games of chance for money or "other stakes," which includes virtual credits, tokens, or objects purchased in-game.
- Definition of Online Games of Chance: These are games where (i) chance dominates skill, (ii) they are presented as games of chance, (iii) chance can only be removed by superlative skill, or (iv) they use random event generators (cards, dice, wheels).
- Tamil Nadu Gaming Authority: This body issues certificates to local providers, sets time/monetary/age limits, and maintains data on gaming activities.
- Non-Local Providers: Providers outside the state must exercise due diligence, such as entering contracts with customers to ensure they aren't in Tamil Nadu and collecting personal details to establish physical presence.
- Penalties: Players of prohibited games face up to three months in prison or a fine of ₹5,000. Providers of such games face up to three years in prison or a ₹10 lakh fine.
PART B: KEY ISSUES AND ANALYSIS
The Ordinance May be Banning Online Games of Skill
The criteria used to define "games of chance" are broad. For instance, requiring random event generators to simulate shuffling cards or throwing dice means almost any online card or dice game—including skill-based games like Bridge—could be classified as a game of chance. Furthermore, the requirement of "superlative skill" to eliminate chance sets a higher bar than the Supreme Court's standard of a "substantial degree or preponderance of skill".
Conflict with Judicial Precedents
The Ordinance explicitly bans Rummy and Poker, yet the Supreme Court (1967) and various High Courts have determined these are games of skill. Courts have noted that tasks like memorizing the fall of cards in Rummy require significant skill.
Restrictions on Fundamental Rights and Privacy
By allowing the Authority to dictate how much time and money an adult can spend on online games, the Ordinance may infringe upon Article 19(1)(a) (freedom of expression) and Article 21 (right to life). There is also a concern regarding privacy, as the state would need to monitor individual usage to enforce these limits.
Differentiation Between Online and Physical Play
The Ordinance requires registration for online game providers but not for those providing the same services physically. For example, a newspaper's online crossword would require registration, while the print version would not, despite the Madras High Court noting that skills for board and card games remain the same regardless of the medium.
Jurisdictional Challenges
The Ordinance requires non-local providers to follow due diligence even for customers based outside the state if they don't use geo-blocking to restrict access to Tamil Nadu. Under Supreme Court precedents (1957), a state law must have a real and not illusory territorial connection to the person being legislated upon; the Ordinance may fail this test for providers and customers with no connection to Tamil Nadu.
Annexure: Inter-state Comparison
| State | Provision | Status |
|---|---|---|
| Tamil Nadu (2022) | Prohibits online gambling and games of chance (inc. Rummy/Poker). | Ordinance in force. |
| Karnataka (2021) | Prohibited wagering/betting in any game of chance or skill. | Struck down by High Court. |
| Meghalaya (2021) | Permits games of skill/chance with a license. | In force. |
| Andhra Pradesh (2020) | Prohibits online gaming, betting, and wagering. | Challenge pending. |
| Nagaland (2015) | Permits wagering on games of skill (e.g., Poker) with a license. | In force. |
| Sikkim (2008) | Permits games of chance/skill with a license. | In force. |
Disclaimer: This brief is for informational purposes by PRS Legislative Research, an independent, not-for-profit group. The opinions expressed are those of the authors.
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