TAMIL NADU GAMBLING LAW: RUMMY, POKER STARTUPS STOP USERS FROM PLAYING REAL-MONEY GAMES

Several online rummy and poker platforms have stopped users from participating in real-money games in Tamil Nadu, following the enforcement of the state's online gambling law. This law, which came into effect on April 21, 2023, categorizes games like rummy and poker as "games of chance," effectively bringing them under the jurisdiction of online gambling regulations.

The Impact of Tamil Nadu’s Online Gambling Law

The law, formally known as the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022, was passed on April 10, 2023. It targets games that involve stakes, including online rummy and poker, which the state has classified as games of chance. This classification has forced various gaming startups, including A23, Classic Rummy, and PokerBaazi, to prevent Tamil Nadu residents from participating in paid contests.

This move by Tamil Nadu is a part of a larger trend where multiple states have either banned or attempted to regulate skill-based online games under the umbrella of gambling, which is a state subject in India. However, many of these state-level bans have been challenged in court, with high courts striking them down as unconstitutional in several instances.

Industry Response

As a result of the new law, Classic Rummy and Head Digital Works (A23) have posted notices on their websites informing users that they are restricted from playing real-money rummy contests in Tamil Nadu. Other gaming platforms like Mobile Premier League (MPL) and Games24x7 have similarly restricted Tamil Nadu users from participating in games involving cards, dice, or games where random number generation plays a significant role.

Legal Challenges and Disputes

The enforcement of the law is expected to create a legal confrontation between Tamil Nadu and the central government. On April 6, 2023, the Ministry of Electronics and Information Technology (MeitY) introduced amendments to the IT Act 2021, allowing multiple self-regulatory organizations (SROs) to determine whether real-money games are permissible in India.

Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar has criticized the Tamil Nadu law, arguing that the internet cannot be regulated by state governments. He emphasized that the nuanced distinctions between games of skill and games of chance are not the central issue and that a more uniform regulatory approach is needed.

Tamil Nadu Online Gaming Authority

As part of the new law, the Tamil Nadu government has established the Tamil Nadu Online Gaming Authority, tasked with regulating online games, issuing registrations, and overseeing the operation of local online gaming providers. The authority will also identify and suspend games considered to be games of chance.

This body will be empowered to issue show-cause notices to non-compliant game providers, with violations potentially resulting in imprisonment or fines. Online gambling services or prohibited games of chance will attract penalties, including up to three years of imprisonment or fines of up to Rs 10 lakh. Players participating in prohibited games could face fines or short-term imprisonment.

Looking Ahead

This legal and regulatory landscape creates uncertainty for the burgeoning skill-based gaming industry in India. While some states have enacted their own regulations, others continue to challenge the legality of such platforms. Industry stakeholders are closely watching the ongoing legal developments, hoping for clarity on the issue of online gaming regulation at the national level.

The Tamil Nadu government's law sets the stage for further legal battles and potential regulatory changes that could shape the future of online skill-based games in India. —register today