Online gaming and online gambling are two sides of the same coin.
(Image: Deeksha Malhotra/ The Quint)
On 16 November, the Madras High Court withdrew a batch of petitions challenging a Tamil Nadu state ordinance that bans online gaming and online gambling, after the state government said that the ordinance had not come into effect yet.
Even as this happens, a central government-appointed task force has recommended a new nationwide legislation to regulate online gaming and digital gambling.
Why now? The Tamil Nadu state government passed an ordinance and later a bill in the state Assembly, on 26 September and 19 October respectively, prohibiting online gambling and gaming, including poker and rummy. This makes Tamil Nadu just one of only a few states in India to pass gambling laws.
What led to this? The Tamil Nadu state government cited a spate of gambling-related suicides over the past few years as well as the findings of the Justice Chandru Committee (we'll explain more about this later in the article), as the primary reasons for the new law.
Where does India stand on online gaming and gambling? Is online gambling banned in your state? And how does India fare compared to the rest of the world?
In the eyes of the law, the difference between gaming and gambling comes down to the element of skill, says Vasundhara Shanker, lawyer and Managing Partner at Verum Legal, who has worked with several gaming companies and payment aggregators.
"An online game which does not involve skill is going to be considered a gambling activity, and not a gaming activity, for the purpose of the law," she adds.
Which law? The Public Gambling Act, 1867, which governs penalties for "public gambling" in the country.
Section 12 of the Act says these penalties won't apply to "any game of mere skill."
So, the key difference, at least under the law, is that gaming which is permitted under law involves skill and gambling is left at the mercy of chance.
Just to clarify, gaming here means gaming for stakes i.e., money. According to Shanker, the exchange of money is an essential element for these games to fall under the scope of gambling laws.
At present, India has just one central law that governs gambling in all its forms. It's called the Public Gambling Act, 1867, and as its name suggests, it's an old law, ill-equipped to handle the challenges of digital casinos, online gambling and gaming.
In fact, this was the reason that, on Monday, 14 November, an inter-ministerial task force recommended creating a new central legislation to govern gambling and online gaming in India.
Now, the Public Gambling Act only allows exceptions if the game being bet on is a "game of skill" and not a game left purely up to chance.
This is why some states have a law specific to govern online gaming while others don't. And on that note...
Which States Have Online Gaming Laws? States like Delhi, Madhya Pradesh, and Uttar Pradesh have adopted the Public Gambling Act with some amendments.
However, other regions like Goa, Sikkim, Daman, Meghalaya, and Nagaland, have drafted specific laws to regulate public gambling in their jurisdictions. But, since it's still a new and growing space, not all of these states have laws to regulate online gaming.
Here's a short list of states that have passed specific laws to govern online gaming:
Sikkim – Sikkim regulates digital casinos offering games like blackjack under the Sikkim Online Gaming (Regulation) Act, 2008. Operators are required to obtain a license under the act and only allowed to offer the games at intranet terminals. Sikkim allows sports betting through intranet terminals as well.
Meghalaya – The Meghalaya government allows land-based and digital casinos under the Meghalaya Regulation of Gaming Act, 2021. Meghalaya also allows sports betting in the form of horse betting, once licensed.
Nagaland - The Nagaland Prohibition of Gambling and Promotion of Regulation of Online Games of Skill Act, 2016 regulates poker in the state as a "game of skill".
Additionally, no states in India have separate specific laws to regulate "games of skill" except Nagaland and Meghalaya.
However, while Nagaland and Meghalaya have specific laws to regulate and even license fantasy league betting, Andhra Pradesh, Telangana, Odisha, and Assam have outright banned betting on fantasy sports leagues as well.
Telangana – In 2017, Telangana banned all forms of online gaming and gambling through an amendment to The Telangana Gaming Act.
Karnataka – The Karnataka government had banned all online games (both of skill and chance) by amending the Karnataka Police Act, 1963, in 2021. However, this was overturned by the Karnataka High Court in February 2022.
Similar laws banning all online games, including games of skill, were passed in Kerala, Andhra Pradesh, and Tamil Nadu. The laws in Kerala and Tamil Nadu were challenged and overturned in courts of law, to exempt games of skill.
Which brings us to the present case.
Like we mentioned in the beginning, the Tamil Nadu state government passed an ordinance banning all online games, including rummy and poker, on 26 September 2022. Three weeks later, the state government passed a bill to replace the ordinance.
As of this report, the bill is awaiting the state governor's approval, before it can become a law. The ordinance is also yet to come into effect.
Shortly after the ordinance was announced, it was challenged by the All India Gaming Federation (AIGF), as being unconstitutional. The Quint reached out to AIGF for a statement on this.
The AIGF's primary contention with the Tamil Nadu government's ordinance is that it prohibits games of skill as well, like rummy and poker. However, now with the state government stating that the ordinance is yet to come into effect, what's going to happen next?