E-Gaming Federation (EGF), a regulatory body for gaming companies in India, said that it will file a lawsuit in the Madras High Court challenging the ordinance passed by the Tamil Nadu government to ban online gaming.
Early this month, the government of Tamil Nadu promulgated an ordinance to ban online gambling and online games such as rummy and poker. The gaming industry has criticised the ordinance and argued that it clubs games of skill with games of chance.
“We have decided to file a lawsuit as it categorises rummy and poker as games of chance. This is in dissonance with multiple legal judicial pronouncements including the recent judgment by the Madras High Court, which has segregated games of skill and chance,” said Sameer Barde, chief executive officer of EGF.
Barde further added that the Supreme Court and several High Courts have recognised skill-based games as “legitimate business activity” and the states must take “cognizance of these judgments” in developing and enabling a gaming policy that safeguards the interests of players.
In August 2021, the Madras High Court quashed the Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021, which banned online betting games including rummy and poker. Several states had imposed similar bans, which were later overturned by the High Courts.
In February this year, the Karnataka High Court quashed the provisions of the Karnataka Police (Amendment) Act, 2021, which sought to ban online rummy in the state. According to EGF, the Court ruled that games of skill cannot be labeled as ‘betting or gambling’ just because they are being played for stakes or played online.
In 2015, the Supreme Court overruled a Madras High Court verdict that deemed rummy for stakes as gambling. The apex court recognised online rummy as a game of skill.
Lawmakers on their part have argued that these online gaming platforms are promoting gambling and may lead to addiction. According to media reports, many users committed suicide due to financial losses incurred on online gaming platforms.
Gaming companies in India have seen unprecedented growth, especially after the pandemic. To be sure, a November 2021 report by Boston Consulting Group (BCG) and Sequoia, shows that the gaming industry in India made $1.8 billion in 2020 at a compound annual growth rate (CAGR) of 38%, which is faster than even the US (10%) and China (8%).