India’s apex court upholds state bans on online money gaming
The Supreme Court of India upheld laws enacted by Tamil Nadu and Karnataka that ban online games played for money or stakes, including rummy, poker, and fantasy sports. The ruling strengthens the powers of states to regulate or prohibit online betting and gambling activities linked to real-money play.
A bench of justices JB Pardiwala and R Mahadevan ruled that there is “no fundamental right” to engage in betting and gambling activities. The apex court said betting and gambling fall outside ordinary commercial activities and therefore do not enjoy constitutional protection under Article 19(1)(g).
The verdict came in the case of State of Tamil Nadu versus Junglee Games. The Supreme Court (SC) set aside earlier rulings by the Madras High Court and Karnataka High Court, which had struck down the state laws.
SC says betting changes nature of games
The SC stated that once betting or wagering becomes part of a game, the distinction between skill and chance loses significance.
“When the element of betting and gambling enters the picture, the nature of the game ceases to be of relevance,” the bench said.
The SC observed that staking money on uncertain outcomes raises concerns related to addiction, repeated attempts to recover losses and the desire to gain more money. It also accepted the arguments made by Tamil Nadu and Karnataka regarding public health and public order risks linked to online money gaming.
The judgment noted that games involving skill may not amount to gambling on their own. However, states still have the authority to regulate or prohibit betting on such games if money or stakes are involved.
Challenge to Tamil Nadu and Karnataka laws
The legal dispute began after Tamil Nadu and Karnataka amended their gaming laws to criminalise online games played for money or stakes.
Tamil Nadu first introduced an ordinance in November 2020. It was later replaced by the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021. The law expanded the definition of “gaming” and introduced provisions prohibiting wagering and betting in cyberspace.
The amendment also removed earlier protections available to “games of mere skill”. This meant games such as rummy and poker could attract criminal liability if played online for money, wagers or stakes.
The state government defended the law by citing concerns over addiction, cheating, financial losses and reported suicides linked to online gaming.
Online gaming companies challenged the legislation before the Madras High Court. They argued that games such as rummy had already been recognised by courts as games of skill and therefore qualified as protected business activities under the Constitution.
The companies relied on earlier Supreme Court judgments, including the Chamarbaugwala, K Satyanarayana and KR Lakshmanan cases, to argue that states could regulate gambling activities based on chance but not skill-based games.
High Court rulings overturned
In August 2021, the Madras High Court struck down key portions of the Tamil Nadu law, holding that the expanded definition of gaming affected the entire legislation. However, the High Court had clarified that the state could introduce a fresh constitutionally valid law on betting and gambling.
Following the High Court rulings, Tamil Nadu and Karnataka approached the Supreme Court seeking restoration of their laws.
The apex court has now ruled in favour of the states, holding that betting and gambling are “res extra commercium”, meaning activities outside commerce. The bench said no fundamental right can be claimed to carry on such activities.
The ruling is expected to have a major impact on the online gaming industry, especially platforms offering real money games such as rummy, poker and fantasy sports across different states in India.
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