05 八月 2021

Online gaming – Madras HC quashes law prohibiting games played for stake even if involving skill

The Madras High Court has struck down the amendment in the Tamil Nadu Gaming Act, 1930, which prohibited all forms of games being conducted in cyberspace, irrespective of the game involved being a game of mere skill, if such game is played for a wager, bet, money or other stake. The amendment was brought in by an Ordinance last year and was formalised by the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 recently.

The Court in this regard observed that the sweeping wording of Section 3-A of the amended Act of 1930, coupled with the expansive definition of ‘gaming’ injected therein, eliminated any chance of display of skill in any game on the virtual mode if any stakes, however little, are involved.

Highlighting various contradictions in the amended law, the Court in the case of Junglee Games India Private Limited v. State of Tamil Nadu also noted that after the amendments, even physical form of game of football or volleyball played for bragging rights between two teams or a tournament which awards any cash prize or even a trophy, would, by the legal fiction created by the definition, amount to gaming and thereby outlawed.

The amendments were also held to be unreasonable and manifestly arbitrary. The Court noted that the State made no endeavour to demonstrate that any lesser form of curbs may not have sufficed.

‘Betting’ cannot be divorced from ‘gambling’

Pondering upon the words ‘Betting and gambling’ in Entry 34 of the State List in the Constitution, the Court held that betting cannot be divorced from gambling and treated as an additional field for the State to legislate on, apart from the betting involved in gambling.

It held that the ‘betting’ that the State can legislate on has to be the betting pertaining to gambling, i.e., betting only on games of chance. Reliance in this regard was placed on the Supreme Court decisions in the cases of Chamarbaugwala and K.R. Lakshmanan, according to which the concept of betting in the Entry cannot cover games of skill.

‘Rummy’ and ‘poker’ are games of skill

The High Court also held that both rummy and poker are games of skill as they involve considerable memory, working out of percentages, the ability to follow the cards on the table and constantly adjust to the changing possibilities of the unseen cards. It observed that though poker may not have been recognised in any previous judgment in India to be a game of skill, but the Law Commission in its 276th Report has accepted the poker as a game of skill.

The Court was of the view that a game of skill may not necessarily be such an activity where skill must always prevail. According to the Court, it would suffice for an activity to be regarded as a game of skill if, ordinarily, the exercise of skill can control the chance element involved in the activity such that the better skilled would prevail often.

Observing that philosophically and realistically, every future event, game or like activity depends on an element of chance which can never be eliminated, the Court held that the vagaries of the unknown and unpredictable, and yet possible, must be kept out of consideration to determine whether an activity is a game of skill. It held that if the odds favouring an outcome are guided more by skill than by chance, it would be a game of skill.

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