A single-judge TR Ravi of the Kerala High Court had allowed a batch of petitions challenging the state government’s ban on online rummy. The Court has now quashed an amendment to a notification issued by the state government under Section 14A of the Kerala Gaming Act, 1960, which sought to ban online rummy in the state. It said that the notification was arbitrary and violative of the right to trade and commerce guaranteed under Article 19(1)(g) of the Constitution and the right to equality guaranteed under Article 14 of the Constitution.
Senior advocates Mukul Rohatgi and Joseph Markos and advocates Santhosh Mathew and Thomas Kuruvilla appearing on behalf of four online rummy companies challenged the ban and said that the government could not impose a ban on online rummy and clarified that it is a game of skill. It was also argued that the power under Section 14A of the Kerala Gaming Act, 1960, is limited to specifying what is a game of sufficient skill to warrant the exemption from gambling regulations.
The petitioners (gaming companies) argued that the Supreme Court and various High Courts had already declared online rummy as a game of skill, which is legal in India. The petitioners relied on the judgments of the Supreme Court in State of Andhra Pradesh vs K Satyanarayana and Ors and KR Lakshmanan vs State of Tamil Nadu and Ors, where it was held that rummy is primarily a game of skill. Advocate N Manoj Kumar, who appeared for the state government, countered this by saying that online rummy was resulting in various social problems, including suicides and loss of hard earned incomes. The state government also argued that the High Court in a separate case in 2019 had ruled that rummy played for money amounts to gambling. It informed the Court that a review petition filed by three online rummy companies against the order was also rejected by the division bench of the High Court.
It is pertinent to note that the state issued a notification on February 23, 2021, clarifying that when played for stakes, online rummy does not enjoy exemption from the general prohibition of gaming and gambling granted under Section 14A of the Kerala Gaming Act, 1960. The four gaming companies Junglee Games India Pvt. Ltd, Play Games 24×7 Pvt. Ltd, Head Digital Works Pvt. Ltd, and Gameskraft Technologies Pvt. Ltd had approached the High Court challenging the impugned notification.
Dinker Vashisht, vice-president, corporate affairs, Games 24×7 said that the judgment by High Court is yet another addition to the jurisprudence that has consistently held that games of skill are not akin to gambling and protected under Article 19(1)(g) of the Constitution. Roland Landers, CEO, All India Gaming Federation (AIGF), said:
“The judgment passed by the Kerala High Court is reassuring for this sunrise sector in India, particularly coming in quick succession of the recent historic positive judgement for online skill gaming by the Madras High Court. We believe that this development will give a major fillip to the industry by encouraging investments leading to technological advancements as well as generation of revenue and employment.”
Landers further said that AIGF is a not-for-profit association and has most of the stakeholders of the online gaming industry as its members. It has a robust self-regulation charter, overseen by the Skill Games Council, which is being followed by all its members in compliance with the extant laws of the land. He added that through the adoption of principles and the disciplinary process, the AIGF has built a self-regulatory community and facilitative ecosystem for the offer of online games of skill in a transparent and fair manner, with due regard for consumer and stakeholder interests.
Reiterating the need for promoting skill-based gaming, Justice Vikramajit Sen, member, Skill Games Council, and former judge of the Supreme Court and former chief justice of the Karnataka High Court, added: “In the last few years, the interest in the online skill gaming has been growing exponentially in the country.”
The Supreme Court and multiple High Courts have reiterated numerous times that online games of skill are protected under Article 19(1)(g) of the Constitution. The Indian online gaming industry is at the cusp of transformation, looking at a growth trajectory of over $3.9 billion in 2025, according to consulting firm KPMG.
With a singular objective of ensuring growth for the industry, while monitoring operational transparency and adherence to the strictest possible norms and protocols, AIGF recently announced the induction of former senior bureaucrat, Dr Sutanu Behuria as president of its Policy & Planning, Rummy Chapter. Commenting on the striking of the online rummy ban notification in Kerala, Behuria said: “We laud the Kerala High Court’s judgment quashing the online rummy ban notification.”
Online gaming today has emerged as an important avenue due to a multitude of favourable factors, such as young and tech-savvy population, affordable availability of feature-packed smartphones, better internet connectivity, increased awareness and development. Therefore, the domestic industry has the potential to scale up quickly and become a meaningful contributor.
Earlier, the Madras High Court quashed those amendments to the Tamil Nadu Gaming Act, 1930, which had imposed a blanket ban in the state on all games (including online games) played for stakes. The Court held that not only were the amendments violative of the fundamental right to a profession, business, trade or occupation, but were also beyond the legislative competence of the state legislature under the relevant legislative entry of “betting and gambling” as provided under the Constitution of India.
In November 2020, the governor of Tamil Nadu promulgated the Tamil Nadu Gaming and Police Laws (Amendment) Ordinance, 2020, which amended the Tamil Nadu Act. The ordinance extended the Act, which governs gaming and gambling in the state, to the online medium and also nullified the existing exemption for games of skill, thereby prohibiting all games played for stakes. The ordinance was soon followed and replaced by The Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, which was enacted in February 2021 and had provisions identical to the ordinance.
The Karnataka Police (Amendment) Bill, 2021, was tabled in the legislative assembly on September 17 to ban online gaming or betting by amending the Karnataka Police Act of 1963, with maximum imprisonment of three years and penalty up to Rs 1 lakh. Karnataka Home Minister Araga Jnanendra introduced the Bill, which aims to “ban online games, involving all forms of wagering or betting, including in the form of tokens valued in terms of money paid before or after issue of it.” It also banned electronic means and virtual currency, electronic transfer of funds in connection with any game of chance.
However, the fact is that the Indian gaming industry over the years has been working to bring due attention to this sunrise sector and the judgment further motivates the industry to move forward. The online gaming industry is outstripping most other sections of our economy, growing in excess of 20 % annually and contributes significantly to tax revenues.
—By Adarsh Patel and India Legal News Service