The Madras High Court has backed Tamil Nadu’s law that regulates online real-money games such as rummy and poker. The law sets limits on player age, betting amounts, playing time, and advertisements. It also requires a two-step Aadhaar verification process for players. The court rejected petitions from online gaming companies challenging these restrictions, stating the rules are valid and necessary.
A division bench of Justice S M Subramaniam and Justice K Rajasekar made a clear point about the potential risks of online real-money games. They said, "In true essence, the online real money games is a trade activity, which, if left unregulated, has immediate implications on health of the public." This highlights the court’s concern about the wider social effects, beyond just business interests.
State’s authority to regulate is clear
Online gaming companies argued that only the central government has the power to regulate these platforms, especially since the Information Technology (IT) Rules, 2021, already offer some oversight. The court did not agree. It noted, "Both the Union and state govts have power to enact laws in their own respective subject matter apart from the common pool as enabled in List III (concurrent list). This court cannot hold that state is barred from enacting laws regulating online real money games. It is covered under the subject matter of public health and sanitation which comes under List II (state list)."
This ruling confirms that Tamil Nadu’s government acted within its rights to pass the legislation.
Filling a regulatory gap
The court also pointed out that the IT Rules, 2021, related to online gaming "is yet to take effect and remains unenforceable as of today." This means there is no current central regulation in place to control online real-money games properly. The judges recognised this gap and supported the state’s decision to introduce rules that protect players and the public. They said, "This court views that the state is fully within its competence to enact laws pertaining to online real money games."
Privacy vs Public interest
One challenge to the law was the requirement for players to verify their identity with Aadhaar. Opponents claimed this infringed on privacy rights. But the court rejected this concern, explaining, "Right to privacy carries with it its own limitations and cannot be claimed in absolute. When put on a scale, a compelling public interest outweighs right to privacy."
This statement makes clear the court values the need to protect the public from harm above the privacy concerns in this case.
This ruling sets a strong precedent. Online gaming platforms must now follow strict rules on who can play, how much money can be bet, how long games can be played, and how they advertise. They must also use Aadhaar verification to prevent misuse or addiction. This marks a shift towards stricter, more localised control of the online gaming industry.
A division bench of Justice S M Subramaniam and Justice K Rajasekar made a clear point about the potential risks of online real-money games. They said, "In true essence, the online real money games is a trade activity, which, if left unregulated, has immediate implications on health of the public." This highlights the court’s concern about the wider social effects, beyond just business interests.
State’s authority to regulate is clear
Online gaming companies argued that only the central government has the power to regulate these platforms, especially since the Information Technology (IT) Rules, 2021, already offer some oversight. The court did not agree. It noted, "Both the Union and state govts have power to enact laws in their own respective subject matter apart from the common pool as enabled in List III (concurrent list). This court cannot hold that state is barred from enacting laws regulating online real money games. It is covered under the subject matter of public health and sanitation which comes under List II (state list)."
This ruling confirms that Tamil Nadu’s government acted within its rights to pass the legislation.
Filling a regulatory gap
The court also pointed out that the IT Rules, 2021, related to online gaming "is yet to take effect and remains unenforceable as of today." This means there is no current central regulation in place to control online real-money games properly. The judges recognised this gap and supported the state’s decision to introduce rules that protect players and the public. They said, "This court views that the state is fully within its competence to enact laws pertaining to online real money games."
Privacy vs Public interest
One challenge to the law was the requirement for players to verify their identity with Aadhaar. Opponents claimed this infringed on privacy rights. But the court rejected this concern, explaining, "Right to privacy carries with it its own limitations and cannot be claimed in absolute. When put on a scale, a compelling public interest outweighs right to privacy."
This statement makes clear the court values the need to protect the public from harm above the privacy concerns in this case.
This ruling sets a strong precedent. Online gaming platforms must now follow strict rules on who can play, how much money can be bet, how long games can be played, and how they advertise. They must also use Aadhaar verification to prevent misuse or addiction. This marks a shift towards stricter, more localised control of the online gaming industry.
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