Why Madras HC’s verdict against ‘betting’ games is a game changer

The petition in Madras HC was filed by Junglee Games and other online gaming companies claiming that the ban is unlawful as rummy has been ruled as a game of skill by the Supreme Court.

Last week, Madras High Court struck down part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021, through which the legislature had imposed a blanket ban on rummy, poker and all other games played online for a wager, bet, money or other stake irrespective of it being a game of skill or a game of chance. The petition in Madras HC was filed by Junglee Games and other online gaming companies claiming that the ban is unlawful as rummy has been ruled as a game of skill by the Supreme Court. The decision was welcomed by industry stakeholders as Tamil Nadu is looked at as an important market for the transactional online skill gaming (TOSG) firms. “Tamil Nadu accounts for approximately 10% of the TOSG universe across revenues and player user base. The impact of this ruling is going to be extremely positive for the gaming industry and its stakeholders,” Roland Landers, CEO, All India Gaming Federation (AIGF) told BrandWagon Online.

To give perspective, Assam, Orissa and Telangana were the first states to ban online games and following the footsteps, Andhra Pradesh and Tamil Nadu passed a blanket ban on online “betting” games this year. While the debate regarding the morality of rummy and poker games has been taking place for a long time, the HC cleared the air with its judgement, “There appears little doubt that both rummy and poker are games of skill as they involve considerable memory, working out of percentages, the ability to follow the cards on the table and constantly adjust to the changing possibilities of the unseen cards,” the court stated. Further it also highlighted that the 276th report of the Law Commission which the State government relied upon to justify the ban stressed only on regulation and not prohibition, bringing forth the discussion of the need for a uniform regulatory framework in the online gaming industry. “The ruling very clearly brings out the need for the sector to be regulated and that banning is not a solution. We expect that there will eventually evolve a consensus between the State governments and the industry and a regulated skill games industry will emerge. Till this happens, a government approved self-regulatory body for all Games of Skill, similar to what the NITI Aayog has advocated in its report, could be considered,” Sameer Barde, CEO, The Online Rummy Federation (TORF) stated.

However, many in the industry believe that before the industry moves towards a uniform regulatory framework, it’s time to set clear definitions for various online gaming platforms so that a fair framework is made, leaving behind no doubts in the minds of both the government and the users. “Another important thing that has been brought into the forefront with this incident is the need to clearly define the various segments of online gaming. There is a lot of confusion in the minds of government officials as well as the users with regards to the online gaming space as they are unable to differentiate between fantasy sports, real money sports, skill based games, esports, among others. A clear demarcation and definition will help in clearing this grey area, thereby allowing the industry to achieve a fair uniform regulatory framework,” Mitesh Gangar, co-founder and director, PlayerzPot, noted. As per Gangar, the Madras HC’s decision will enable the company to onboard additional users on top of the 7% they lost at the time of ban as the southern part of the country is predominantly a rummy playing audience.

While this is not the first ruling that came out in the favour of the online gaming industry in India, it just might be one of the important ones as it has set a precedent to open a discussion between the state government and the industry stakeholders. The online gaming industry is a nascent industry in India and comes with a lot of grey areas, thereby stacking up a levy of court cases as well as derision from the government for promoting betting and gambling. Up until now, it’s the courts that have been clearing the doubts regarding the sector. Run mostly on a self-regulation basis, some industry stakeholders believe that the TSOG segment should get a regulatory framework from the government now. “While I do root for self-regulations, I believe that if the regulatory framework has been set-up by the government, it will be followed in spirit as well as in practice. At this point, the best thing for the sector will be the government setting up a uniform set of regulatory guidelines so as to avoid any grey areas and bring forth clarity,” Varun Puri, founder and chairman, Dangal Games, highlighted.

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