A. Introduction

The Indian Parliament recently passed The Promotion and Regulation of Online Gaming Act, 2025 (‘Online Gaming Act’). The remit of Online Gaming Act, despite its name, is not merely restricted to promotion and regulation. Section 5 of the Online Gaming Act imposes a complete prohibition on one category of online games, i.e., online money games. Section 2(g) of the Online Gaming Act defines online money games as:

“Online money game” means an online game, irrespective of whether such game is based on skill, chance, or both, played by a user by paying fees, depositing money or other stakes in expectation of winning which entails monetary and other enrichment in return of money or other stakes; but shall not include any e-sports; (emphasis added).

Reading Section 5 of the Online Gaming Act with Section 2(g), reveals that the prohibition extends to both kinds of online money games – games of skill and games of chance. Irrespective of whether an online game involves pre-dominance of skill or chance, the presence or use of real money in a game invites the prohibition. By relying on real money as a criterion to prohibit online games, the Online Gaming Act has introduced new a criterion to regulate online games.

Prior to the advent of online games, India’s various State-level gaming laws typically prohibited only games of chance; presence or absence of stakes or real money was irrelevant. But various States in their attempt to regulate online games reacted in a knee jerk fashion and attempted a blanket ban on online games, encompassing both games of skill as well as games of chance. For example, States of Kerala, Karnataka, and Tamil Nadu tried to impose such complete bans on online games but various High Courts held that a complete ban on online games was unconstitutional. The High Court invoked the doctrine of proportionality, protection of fundamental rights of privacy, free speech among other grounds.   

This article relies on the laws enacted by the above-mentioned States and relevant judgments to make two claims:

First, that States’ assertion that online gaming is incomparable to traditional gaming is based on a generic comparison. States have used reasons such as easy access of online games, possible addictions, and other such reasons to completely deny access to online games to users. But, I suggest that the above reasons are an attempt by States to subject online games to onerous regulation in the form of bans and are being substituted for a more careful and nuanced regulation. 

Second, States have not discharged the burden that the distinction between games of skill and games of chance is irrelevant to online gaming. The combined effect of State’s failure on both counts has been that various High Courts, until now, have correctly disallowed blanket bans on online gaming in India.

This article makes the above two claims and concludes that the Union of India’s impending defense of the Online Gaming Act will – at least – need to succeed on both the above counts. Else, the Online Gaming Act may meet the same fate as the various State-level legislations that aimed to impose a blanket ban on online gaming.

B. Traditional Gaming versus Online Gaming

Various traditional games that were previously played exclusively in-person have been suitably adapted for online gaming. For example, chess, ludo, and various card games such as poker and rummy are now often played online. The proliferation of online gaming prompted the States of Tamil Nadu, Kerala, and Karnataka to impose a sweeping ban on them. For example, Tamil Nadu amended the Tamil Nadu Gaming Act, 1930 in 2021. Section 3-A, Tamil Nadu Gaming Act, 1930 inserted via the amendment made playing poker and rummy in cyberspace punishable with imprisonment and liable for a fine.

The amendment to the Tamil Nadu Gaming Act, 1930 created a differentiation between traditional and online games. For example, rummy played in-person continued to be recognized as a game of skill and legally permissible. But rummy played in cyberspace became a game of chance, making players liable to face imprisonment and pay fines. The above differentiation created by the amendment was one of the subjects of challenge before the Madras High Court inJunglee Games India Private Limited v The State of Tamil Nadu (‘Junglee Games’).

In Junglee Games, the State of Tamil Nadu argued that online games could not be compared to games played in cyberspace or online. The State’s argument implied that the same game could be subjected to differing regulations based on the medium in which it was played. The Madras High Court agreed that traditional games and online games were incomparable, but added a crucial nuance:

“However, when it comes to card games or board games such as chess or scrabble, there is no distinction between the skill involved in the physical form of the activity or in the virtual form.”

The Madras High Court placed the onus on the State to establish that certain games, when played online, transformed into games of chance. The import of the Madras High Court’s observation was clear: the State’s mere assertion that a game is being played online is not a sufficient reason to accept that the game is a game of chance.

In a similar vein, the Karnataka High Court in All India Gaming Federation v State of Karnataka (All India Gaming Federation-I) observed that a game of skill does not metamorphize into a game of chance merely because it is played online. The High Court was adjudicating on a challenge to the blanket ban on online gaming imposed via an amendment to The Karnataka Police Act, 1963. The High Court held that an absolute embargo on all kinds of online games was unconstitutional as the State had created a new category of ‘medium-based regulation’. The High Court held that a change in medium, from offline to online, did not alter the content and nature of the game.

While the Karnataka High Court unequivocally dismissed categorization of games based on the medium in which they were played, the Madras High Court’s observation was comparatively less decisive. The latter allowed the State to narrowly tailor the restrictions – and impose a ban – for specific games that transform into a game of chance when played online. In fact, post the Madras High Court’s judgement, the State of Tamil Nady narrowed the scope of its ban on online games through a new law.

Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 (Act of 2022) imposed a ban only on online games of chance. Section 2(l) of the Act of 2022 defined online game of chance to include only those games where element of chance dominated skill. Additionally, Section 7 of the Act of 2022 also permitted the State to notify certain games as online games of chance. And the State of Tamil Nadu notified online rummy and online poker as online games of chance under the Act of 2022. The categorization of online poker and online rummy as online games of chance was one of the subjects of challenge before the Madras High Court in All India Gaming Federation v State of Tamil Nadu (All India Gaming Federation-II). The Madras High Court upheld the vires of the Act of 2022 but set aside the notification classifying online rummy and online poker as games of chance. The Madras High Court noted that the State’s claim that online poker and online rummy were games of chance was based on presumption. And that the State has not been able to establish how games of skill such as rummy or poker became games of chance when played online. The Madras High Court rejected the State’s claim that traditional poker and online poker were not comparable and held that:

“The State has miserably failed to demonstrate that online games of rummy and poker are different and distinct from offline games of rummy and poker. The apprehension expressed by the State that bots may be used or the dealer (software) would know the cards are without any substantive material.”       

The State of Kerala also tried to impose a narrow ban on online games by issuing a notification under the Kerala Gaming Act, 1960. The effect of the notification was that ‘online rummy played for stakes’ was equated to a game of chance and made punishable. However, the Kerala High Court in Head Digital Works (P) Ltd v State of Kerala (Head Digital Works) held that the notification was ill-conceived. The Kerala High Court underlined that merely because a game is being played for money or stakes is not enough to term it as a game of chance. The inclusion of money is not, by itself, enough to change the character of a game from a game of skill to a game of chance. The Kerala High Court’s observations aligned with a well-established view under Indian gambling law, i.e., a game of skill does not transform into a game of chance merely because it is played for stakes. It is the pre-dominance of skill over chance or vice-versa that establishes the nature of the game.

The decisions in Junglee Games, All India Gaming Federation-I, All India Gaming Federation-II, and Head Digital Works establish that the State cannot legislate on the presumption that all online games are games of chance. The argument that an online game amounts to a game of chance needs to be established in reference to each game or a specific category of games. To begin with, a blanket ban on all online games may not pass the test of proportionality endorsed by courts in adjudicating the constitutionality of a law.

C. Relevance of Game of Skill-Game of Chance Distinction qua Online Gaming

The attempt by the above-mentioned States to impose bans on online gaming assumes that: the distinction between games of skill and games of chance is inapplicable to online gaming. However, States have not been able to articulate with specificity as to why the long-standing distinction between games of skill and games of chance should be inapplicable to online games.

States in justifying their broad bans on online games have only assumed that all online games amount to game of chance. To the extent States have provided reasons, they have been unconvincing. Either States have used the fact that online games have ruined families and individuals. Or they have stressed on the addictive nature of online games, their easy access and possibility of financial ruin, and even mentioned suicides. The Karnataka High Court in All India Gaming Federation-I rejected the above as a ‘scare argument’ and placed the onus on State to articulate more substantive grounds for a ban on online games. While some of the State’s above arguments have merit especially the addictive nature of online games, they are irrelevant to demonstrate that all online games are games of chance. The Madras High Court in Junglee Games pointedly observed that when a law seeks to stultify or negate skill altogether the onus is on the State to justify the restrictions. State’s subjective perceptions of addiction are not sufficient.  

The distinction between the two kinds of games is crucial for various reasons. To begin with, only games of skill are protected under Article 19(1)(g) of the Constitution. The Supreme Court inState of Bombay v R.M. D. Chamarbaugwala (RMDC-I) held that games of chance are res extra commercium and undeserving of constitutional protection under Article 19(1)(g) of the Constitution. The position of law laid down in RMDC-I is undisturbed. Thus, if all online games are by default treated as games of chance – either under the Online Gaming Act or any State legislation – it will amount to denying all online games the protection of Article 19(1)(g) of the Constitution. States must discharge the burden of proving that the ban is proportionate and necessary if the import of a law is to deny all online games a crucial constitutional protection. Mere presumptions and generalized views about online games are not sufficient to pass the test of constitutionality.

Apart from Article 19(1)(g) of the Constitution, the Karnataka High Court in All India Gaming Federation v State of Karnataka linked games of skill to Article 19(1)(a) of the Constitution and held that they contain elements of expression. The High Court further added that playing online games of skill may also be a pursuit of happiness that falls within the contours of liberty and privacy of an individual. The Karnataka High Court’s observations were novel and a welcome addition to gaming law jurisprudence in India. While the High Court did not decisively state that playing games of skill is protected under Article 19(1)(a) or under the right to privacy, it provides grounds to argue in the future that game of skill is not exclusively protected under Article 19(1)(g) of the Constitution.       

The Madras High Court in Junglee Games also provided games of skill protection against arbitrary legislative acts and indirectly invoked Article 14 of the Constitution. The High Court observed that originally the Tamil Nadu Gaming Act, 1930 recognized the distinction between games of chance and games of skill, but the amendment prohibits all forms of games played in cyberspace. Madras High Court noted that the amendment ‘rules out any element of choice that an individual may exercise’ and concluded that it ‘smacks of unreasonableness’ and is manifestly arbitrary, hence violative of Article 14.

Finally, when States have tried to dismiss the relevance of skill-chance distinction, they have highlighted the possibility of misuse by gaming service providers. For example, in All India Gaming Federation, State of Tamil Nadu argued that online poker is susceptible to misuse and cannot be termed as a game of skill akin to the traditional poker. State of Tamil Nadu implied that since online poker winners are determined because of manipulation by bots and robots, online poker is a game of chance. But the Madras High Court refused to label online poker as game of chance. The Madras High Court underlined that poker and rummy are games of skill as per various judicial precedents and the same legal position is applicable to the online versions of both games. As regards manipulation by bots, the Madras High Court observed that instances of manipulation can be addressed individually instead of levying a ban on all online games by terming them as games of chance. Here again, the import of the Madras High Court’s observation is clear: States need to narrow-tailor the bans and restrictions on online games.        

Recently, the Madras High Court in Play Games 24×7 v State of Tamil Nadu (Play Games 24X7) endorsed the distinction between physical games of skill and online games of skill. The High Court was of the view that latter can be subjected to more onerous restrictions as compared to physical games of skill. The petitioners in this case had challenged the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025 drafted by the State of  Tamil Nadu under Act of 2022. Regulation 4(viii) mandated ‘blank hours’ for online real money games between midnight to 5am. Similar restrictions did not exist for physical games of money. The Madras High Court held that the State was competent to impose the above restriction on online real money games regardless of whether they were games of skill.

In Play Games 24×7, the High Court has impliedly endorsed the distinction between online games based on the criterion of real money. The High Court rejected the petitioner’s claim that the impugned Regulations should be read down to be applicable only to online games of chance. The High Court’s focus was on real money involved in the online games and not that skill was pre-dominant in such games. The High Court invoked public health, possibility of addiction, dopamine rush, and lack of discipline in online games as compared to traditional games of skill. Differentiating between traditional games of skill and online games of skill is an appropriate regulatory approach.

D. Conclusion

The limited jurisprudence on online gaming discussed above provides enough reasons to conclude that a blanket ban on online gaming imposed by the Online Gaming Act is constitutionally suspect. At least the various High Courts through concur that an across the board on online games is constitutionally indefensible. With respect to the Online Gaming Act, the Union of India needs to – at least – succeed on both the grounds identified above to defend the constitutionality of the complete prohibition on online money gaming. Union of India also faces an additional hurdle of proving legislative competence since ‘betting and gambling’ is a subject in List II of the Seventh Schedule. 

Even if the Online Gaming Act emerges unscathed from a constitutional challenge. It is unfortunate that measured regulatory responses towards online gaming are under threat of being swallowed by the sledgehammer approach adopted under the Online Gaming Act. And measured regulation of online gaming is not completely alien to India.

In 2021, the Union of India showed an inclination to adopt a measured response towards online gaming when it issued the Information Technology (Intermediary Guidelines and Digital Media Ethics Code), 2021 (‘Guidelines’). The Guidelines envisaged licensing requirements for online money gaming and appointment of Online Gaming Self-Regulatory Bodies. But they proved to be a non-starter. Rule 4B of the Guidelines provided that relevant obligations for online gaming intermediaries will not apply unless three entities are designated as self-regulatory bodies by the Union of India. Since the Union never designated the minimum no. of entities as self-regulatory bodies, the Guidelines never came into force for online gaming intermediaries.   

Equally, some States such as Sikkim and Nagaland have created measured responses to online gaming by mandating licensing requirements for online games. The former uses licensed online games to raise additional revenue. The latter requires the online gaming intermediaries to restrict access of online games based on geographical locations of the users. And ensures that its policy of permitting licensed online games does not encroach jurisdiction of other States that may disallow its residents from participating in such games.

But whether the Online Gaming Act spells doom for varied State-level responses to online gaming or it paves a way for a more considered regulation is likely to be revealed only in the future.