The Supreme Court on Friday issued notice on a petition filed by the Tamil Nadu government challenging the Madras High Court’s judgment that had struck down the state’s ban on online gambling such as rummy and poker on cyberspace with stakes.
A Bench led by Justice Aniruddha Bose sought response from skill-based gaming firms Junglee Games, Play Games24x7, Head Digital Works and industry body All India Gaming Federation on the TN government’s appeal seeking restoration of the ban.
The Tamil Nadu government had moved the Supreme Court against the Madras High Court’s order that struck down the Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021 that banned playing of games such as rummy and poker on cyberspace with stakes. However, the HC had said that there was nothing to prevent the State from enacting a new law to regulate these games.
Later, Kerala and Karnataka high courts had also overturned similar suspensions in their respective states.
The TN government told the SC that the HC erred in declaring that the state government lacked legislative competence to adopt the 2021 Amendment Act. “The HC lost sight of the fact that the impugned amendment Act, in pith and substance, qualifies as a legislation on the subject of ‘betting’, which is a distinct area open for State legislation under the Constitution,” it said.
Contending that teenagers and adults were losing their entire earnings and savings in these online betting games, the Tamil Nadu government said that though rummy might be a game of skill, the game using stakes will become gambling.
According to the petition, the impugned Amendment Act is also entirely consistent with Part III of our Constitution. As for compliance with Article 14, the 2021 Amendment Act is reasonable as it “makes a clear-cut classification between online games played for financial or other valuable stakes and other games” and the classification has a “rational nexus with the stated object of the impugned Act in countering ruinous addiction to gambling activities, which has led to numerous suicides and other economic and social harms. Neither can the impugned Act be described as manifestly arbitrary, since its enactment was guided and supported by a body of data and administrative experience describing the ill-effects of gambling addiction in society,” the state government said.
Terming the game as a legitimate business, the HC on August 3 had declared as unconstitutional, Part II of the TN Gaming & Police Laws (Amendment) Act, 2021, which banned betting or wagering in cyberspace and also games of skill if played for a wager, bet, money or other stakes.
By imposing a wide ranging complete ban, the least intrusive test was violated and the ban had thereby fallen foul of Article 19(1)(g) of the Constitution that allows people the right to practise any profession, or to carry on any occupation, trade or business, the HC said.
It also added that the legislation imposing a wide-ranging ban must be regarded as excessive and disproportionate to the object sought to be achieved.