Supreme Court Affirms Ban on Online Money Games in Tamil Nadu and Karnataka
The Supreme Court of India has ruled that there is no fundamental right to engage in betting and gambling. In a significant decision, the Court upheld laws introduced by Tamil Nadu and Karnataka, which criminalize online games played for monetary stakes, including rummy, poker, and fantasy sports. This ruling came in the case of State of Tamil Nadu Vs Junglee.
A Bench comprising Justices JB Pardiwala and R Mahadevan overturned the judgments of the Madras and Karnataka High Courts, which had previously invalidated these laws. The Supreme Court clarified that since betting and gambling are considered res extra commercium (activities outside commerce), individuals cannot claim a fundamental right to carry out such activities.
The Court emphasized that even if online games contain elements of skill, States have the authority to prohibit them if money is involved. The ruling stated, “When the element of betting and gambling enters the picture, the nature of the game ceases to be of relevance.” The decision highlighted concerns about addiction and the pursuit of monetary gain through uncertain events.
Justice JB Pardiwala and Justice R Mahadevan recognized the public health and order issues raised by the States, noting the risks of addiction, financial losses, and suicides associated with online money gaming. These concerns were pivotal in the Court’s decision to uphold the bans.
Background of the Legal Battle
The controversy began with amendments by Tamil Nadu and Karnataka aimed at criminalizing online games played for stakes. Tamil Nadu enacted an ordinance in November 2020, subsequently replaced by the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021. This law expanded the definition of “gaming” and introduced Section 3-A, prohibiting wagering or betting online, affecting even skill-based games like rummy and poker if played for money.
The State defended the law, citing the addictive nature of online gaming, reports of cheating, and related suicides. Online gaming companies challenged this law in the Madras High Court, arguing that rummy and similar games are skill-based, and regulation should only apply to games predominantly based on chance. They referenced previous Supreme Court rulings such as Chamarbaugwala, K Satyanarayana, and KR Lakshmanan to assert that skill games are protected business activities under Article 19(1)(g) of the Constitution.
In August 2021, the Madras High Court invalidated Part II of the 2021 amendment, allowing for new legal provisions that could withstand constitutional scrutiny. Following suit, Karnataka amended its Police Act in 2021, broadening the scope of gaming to include online wagering, electronic transfers, and virtual currency. This amendment was similarly challenged, leading to its annulment by the Karnataka High Court in February 2022.
Both States appealed to the Supreme Court, which ultimately had to decide if State legislatures possess the authority to enact such regulations. The Supreme Court’s affirmation of the bans marks a crucial stance on the regulation of online gaming activities in India.
