Online gambling can earn you a jail term in Tamil Nadu, but what's next?

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NEW DELHI : Tamil Nadu has banned online gambling, rekindling a campaign against gaming firms in India that has raged for over a year-and-a-half. The move came just three days after the Centre included gaming firms under its intermediary rules. Mint explains the controversy:

What just happened in Tamil Nadu?

After much back-and-forth (even within the state government) the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance was passed on 10 April. The bill seeks to prohibit online gambling, its promotion through advertising, and more. There are punitive measures: a jail term of up to three months, or a fine of up to ₹5,000, or both. For those facilitating these games, the punishment is imprisonment by up to a year, or a fine of ₹5 lakh, or both. Gambling being a state subject, the MK Stalin-led government is well within its rights to regulate it within its borders.

What are the gaming firms saying?

Tamil Nadu’s ban includes rummy and poker, two games that have long faced court battles over their legality. Indian law says games of skill cannot be considered gambling. These include the likes of fantasy game Dream11 and horse racing. Rummy was described as a game of skill by the Supreme Court over 50 years ago. While poker doesn’t have a similar SC approval, several high court rulings have categorized this as a game of skill. Since India’s constitution says that a Supreme Court ruling becomes law of the land, gaming firms argue that the Tamil Nadu ordinance runs against the constitution.

What’s the debate all about?

Online card games didn’t exist when the original SC ruling was passed, and hence a case could be made that it considered offline rummy as a game of skill. Since online card games don’t involve gauging an opponent’s body language, it could be said that they are not games of skill. To be sure, these questions were raised in the US over a decade ago leading to similar issues.

What is the Centre’s stand?

On 7 April, the Centre amended its Information Technology rules to include gaming firms as intermediaries. These rules give gaming firms the same protection as social media firms under the IT Act. Some argue this means the Centre considers online games legal. However, IT Rules form what is called “delegated legislation" —they pass on the responsibility of regulating a sector to certain authorities, in this case self-regulatory bodies to be accredited by the govt. They do not overrule states’ power to regulate gambling.

Why does the TN ban worry gaming firms?

Tamil Nadu has clarified that only online gambling is banned within its borders, and the ordinance doesn’t apply to all online games. Gambling firms worry the ordinance may set a precedent for other states, and lead to more bans. There are advocates of bans on online games like rummy, poker etc. within the overall gaming industry in India too. They worry the stigma of gambling attached to these games may cast a shadow on all mobile and online games that require users to pay money for winnings.