On 20 November 2020, the Government of the State of Tamil Nadu in India passed an Ordinance banning online gaming stating that due to online gaming, innocent people, mainly youngsters, are being cheated, and some people have even committed suicide. The Government of the State of Tamil Nadu has thus decided a ban over online gaming to avoid such incidents of suicide and protect innocent people from the evils of online gaming. The Ordinance has been promulgated by amending the Tamil Nadu Gaming Act, 1930 (Tamil Nadu Act III of 1930), Chennai City Police Act, 1888 (Tamil Nadu Act III of 1888), and the Tamil Nadu District Police Act, 1859 (Tamil Nadu Act XXIV of 1859). Hence the three Acts are no more applicable in the State of Tamil Nadu.

The Ordinance provides for the following:

• Ban on wagering or betting in cyberspace using computers or any communication device or resource.

• Persons found indulging in such gaming would be punishable with a fine of Rs 5,000/- and six months of imprisonment.

• Ban on the \”electronic transfer of funds” used for wagering or betting, or distributing the winnings, or prize money.

• People who open/keep a common gaming house would be punished with a fine amount of Rs.10,000/- and two years of imprisonment.

• Persons found running a company conducting online gaming by wagering and betting would be punished.

In view of the above, the persons indulging in online gaming shall be heavily fined and imprisoned. The new law includes the internet as a space where gambling can take place and increases punishments for running and opening a gaming house as well as makes company executives liable.

The Ordinance comes as a concern addressed by the Madras High Court in the petition, filed by S. Muthukumar which calls for action against online rummy platforms such as PlayGames24x7 and was heard by a division bench of the Madurai bench. During a hearing of petition, the Court had directly called for a law prohibiting or regulating online gambling wherein the Court said that it hopes that appropriate, adequate and immediate measures, including bringing a legislation, to prohibit or regulate Online Gambling would be taken by the Government before the next hearing in order to ensure that no precious life hereinafter will be lost. Also in D Siluvai Venance V. State, the Madras High Court sought to address the negative effect of online gaming by resolving the regulatory void in the online and virtual gaming space.

In most states of India games of skill are distinguished from the game of luck and are exempted by law. They are not considered as gambling and now similar exemption is granted to games of skill played online, which includes fantasy gaming services as per jurisprudence in High Courts. This could possibly mean that investing real-money into fantasy teams on Dream11, MyCircle11, and other similar services, may not fall under this ordinance and can continue to be offered in the State of Tamil Nadu.

Also in Mohammed Rizvi v. Union of India filed before the Madras High Court, the Petitioner seeks action against cricket personalities, including the captain of India’s cricket team, Virat Kohli, and former cricketer and current Board of Control for Cricket in India (BCCI) chief Sourav Ganguly, and few actors like Tamanna Bhatia, Rana Daggubati, Prakash Raj and Sudeep for endorsing fantasy gaming services, alleging that online gambling is pushing Indians into penury and forcing people to commit suicides.

Union Territory of Puducherry has also written to the Centre seeking a similar action in respect of online gaming activities after the suicide of few people who suffered a heavy financial loss in the online rummy game. Also, the Gujarat High Court has recently observed that the present legal framework in reference to gambling should be regulated to include virtual/ online/ cyberspace gambling.

In September 2020, the Andhra Pradesh government issued an ordinance criminalising online gambling and even brought online gaming within its scope. The neighboring state of Telangana banned online gambling by amending its gaming law. A few months ago, the Government of India banned several Chinese apps including PUBG, TikTok, etc., for data protection and in order to secure the privacy of people and the nation.

Against the backdrop that real money gaming advertisements and the way that they are advertised occasionally create a perception that such games may become a source of income, livelihood, or profits as opposed to being a source of entertainment, the Advertising and Standards Council of India (ASCI) has published guidelines around advertisements pertaining to real money gaming on 24 November 2020. These guidelines will be effective from 15 December 2020. These guidelines are a necessary and progressive step towards the promotion of responsible gaming culture in India since these games are also played by kids of almost all ages and therefore, lack of money to avail add ons may also put peer pressure on them which may lead to unwanted circumstances towards the development of such kids.

The above Ordinance being an Ordinance will require to be presented before the session. The Assembly is required to approve the Ordinance, with or without changes, within six weeks of reassembling pursuant to Article 213 of the Constitution of India, failing which the Ordinance will cease to be in force.

The app based/ online gaming industry is huge and has a huge base of followers across the globe and every few days some e-gaming platform is launched whether for real money winning or as a form of entertainment. Realising the potential of the gaming industry even India has introduced certain gaming applications which aim at inculcating nationalism or Indian values among its consumers. However, in this competitive world many of them start pre-registration of such gaming applications through play store etc. before their release date.

Hence, considering the social menace caused due to investment of real money in online gaming is real and therefore, several State Governments and High Courts of several Indian States are increasingly paying attention to curb or regulate online gambling and real money gaming.

-Vaidehi Harshad Samant

Advocate, Mumbai.