Tamil Nadu gambling law: Rummy, poker startups stop users from playing real-money games

On April 14, Union Minister of State for Electronics and Information Technology Rajeev Chandrasekhar had said that the internet cannot be regulated by states, hence it is "meaningless" for a state government to try and legislate sectors such as online gaming.

"As we saw recently, Tamil Nadu enacted its own law, essentially creating a regulatory minefield of uncertainty, ambiguity, confusion, etc," the junior IT minister said in Twitter Spaces session "In my opinion and with no disrespect to the government of Tamil Nadu, the Tamil Nadu Act is really lost in a sense, because it's making all these complex nuances about games of chance and games of skill which is really not the issue today."

Apart from Tamil Nadu, several state governments including Andhra Pradesh, Telangana, Kerala, and Karnataka, have banned or tried to ban these skill-based games or real money games, bringing them under the purview of online gambling as gambling is a state subject.

Many of these bans were later challenged in state high courts by skill gaming startups and industry associations, and the suspensions were overturned, with the state courts declaring it unconstitutional.

The Tamil Nadu government had moved the Supreme Court in December 2021 challenging a Madras High Court decision that overturned the previous AIADMK-led government's November 2020 ban on online games involving the transfer of money. The case is still pending a hearing with the apex court.

South India is a particularly important market for skill-based games such as Rummy, which has a significant penetration in these states, industry executives have previously told Moneycontrol.

What companies are doing

Classic Rummy has put a notice on its website that users residing in Tamil Nadu will not have access to cash-based rummy contests while Head Digital Works' A23 has mentioned that players from the state are not permitted to play cash-based games.

Bengaluru-based skill gaming platform Mobile Premier League (MPL) has also stated on its website that users from Tamil Nadu are restricted from participating in contests related to any game involving the use of cards or dice or games where the gameplay relies dominantly on random number generation. Skill gaming firm Games24x7 which runs RummyCircle also confirmed that they will also be complying with the law.

Tamil Nadu online gaming authority

Apart from banning online rummy and poker, Tamil Nadu has setup a five-member authority called Tamil Nadu Online Gaming Authority that will have powers to regulate online games, issue registrations and oversee the functioning of local online gaming providers, identify games of chance for suspension, and resolve any grievances or complaints received against any gaming provider.

The authority will have a chairperson who is an officer, retired from a post not below the rank of Chief Secretary, and four members, including an officer, who has retired from a post not below the rank of Inspector General of Police, an expert in the field of Information Technology, an eminent psychologist and an expert in the field of online gaming.

The authority can also issue a show-cause notice to an online games provider if they fail to comply with these rules.

Any person offering online gambling services or prohibited online games of chance will face an imprisonment of up to three years or a fine of up to Rs 10 lakh, or both. Meanwhile, people playing these games with stakes shall face imprisonment of up to three months or a fine of up to Rs 5,000 or both.

People aggrieved with the gaming authority's order can appeal to a three-member Appellate Authority comprising a chairperson and two other members, appointed by the state government.