Recent Trends in Gaming and Gambling Laws

In recent times, states such as Karnataka and Tamil Nadu have been pro-actively seeking to amend laws relating to gaming and gambling. This present article explores the laws relating to the gaming/gambling industry, particularly for certain states.

First off, to clarify why the State has an upper hand: as per the Constitution of India, 1950 (“Constitution”) ‘betting’ and ‘gambling’ form a part of the State list and thus each State can create laws pertaining to these. The roots of gambling laws goes back to ‘The Public Gambling Act, 1867’ which dealt with penalty for public gambling, and keeping of common gaming houses. It is to be noted that the Public Gambling Act, 1867, (“Central Law”) does not define the terms “public gambling” and “gaming”. but the Central Law excluded games of mere skill from its ambit. In this article, we have limited our review to the scope of the changing gaming and gambling laws to two states i.e., Tamil Nadu, and Karnataka.

State- Specific Laws and Status

Tamil Nadu

The Tamil Nadu Gaming Act, 1930 (“TN Gaming Act”), provides that gaming “does not include a lottery but includes wagering or betting” (lottery is on the central list as per the Constitution) and excludes any game of mere skill irrespective of where it was played.

In the last few years, the government in Tamil Nadu had promulgated the TN Gaming and Police Laws (Amendment) Ordinance, 2020, and introduced changes vide the Tamil Nadu Gaming & Police Laws (Amendment) Act, 2021 (“TN Gaming Amendment Act”). The TN Gaming Amendment Act expanded the scope of the definitions of (i) ‘gaming’ to include wagering or betting done “in cyber space”; (ii) ‘common gaming house’ to include a cyber-space; and (iii) ‘instruments of gaming’ to include items such as cards, dice, gaming table or cloth, board, computers, computer system, computer network, computer resource, any communication device, or any other article used or intended to be used as a subject or means of gaming. Moreover, the TN Gaming Amendment Act provided that games of mere skill that were played for wager, bet, money or other stake, were prohibited.

However, in Junglee Games India Private Limited and another v. State of Tamil Nadu (“Junglee Games Case”), delivered on August 3, 2021, the Hon’ble Madras High Court struck down Part-II of the TN Gaming Amendment Act declaring it ultra vires inter alia stating that the State cannot legislate on matters relating to games of skill. The matter is before the Supreme Court of India on a challenge by the State of Tamil Nadu. The decision in the Junglee Games Case did not take away the right of the state legislature to enact laws on ‘betting’ and ‘gambling’.

Recently, the governor of Tamil Nadu gave his assent to the ‘Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022’ (“2022 Ordinance”). The 2022 Ordinance introduced new definitions such as ‘online gambling’, and ‘online game of chance’, further providing for inter alia (i) prohibition of online gambling; (ii) regulation for local game providers; and (iii) setting up of an authority to regulate the affairs of online gaming.

Karnataka

The operative law i.e., the Karnataka Police Act, 1963 (“Karnataka Act”) was proposed to be amended vide the Karnataka Police Amendment Bill, 2021 (“Bill”). The Bill inter alia (i) expanded the ambit of the definition of ‘gaming’ and ‘instruments of gaming’ to include online games involving all forms of wagering or betting and online gaming aspects respectively and (ii) provided for definition of “online gaming” (iii) excluded prohibition of wagering by persons engaged in taking part in a game of skill. The Bill was challenged in the matter of All India Gaming Federation v. State of Karnataka & Anr and the High Court of Karnataka struck down provisions of the Bill that inter alia excluded prohibition of wagering by persons engaged in taking part in a game of skill. Presently the matter is before the Supreme Court of India on an appeal.

Guest Author: Vincy Gandhi, graduate, LL.B, S.N.D.T College