Laying On Justice: The Philosophical Incongruity of Real Money Gaming and the Law

PREFACE

On 2^nd January 2025 a senior BJP leader, Mr.Vijay Goel had an interview with the Hindu in which he stated “Online gaming is synonymous with online gambling and people are being financially ruined”. This creates concern and also brings real money gaming and its conflict with the law into the limelight. Gambling has a long history in India. In the 4^th century, people used to play games with dice. Chopper and pachisi were the games that were played and were an important part of society. Even at the time of Mahabharat people used to play gambling but at that time gambling was looked upon negatively. After 16 the century Mughals came & even at their time other forms of gambling were created. Like the Mughal emperor, Akhbar was fond of gambling through cockfighting. Due to this history of gambling the Britishers passed a law on 25^th January 1867 which was named the Public Gambling Act 1867 which became the root cause of these things in the future. The law was mainly passed to ban gambling houses so that people don’t play gambling in public places and gambling houses. Section 13 of this act banned gambling done on animal fighting but there were no provisions on online games, or fantasy games as there was no internet at that frame of time. Sections 12 and 18 of the Public Gambling Act 1867 mentioned gambling as illegal in India but if anyone plays any game that is based upon skills then it can be played therefore a game of chance was illegal but a game of skill was legal. The only problem with this law was there was nothing specified about what games would be considered as the game of skill while others as game of chance. In the year 1947 when India gained independence it adopted the Public Gambling Act 1867 as it is without any changes but one thing that this act was categorized in the state list of the Seventh Schedule meaning if the state wanted to follow it as it was then it could do so or if the state wants to it can change and make a new law on its own. Sates like  Bihar, Chattisgarh,  Manipur, etc. followed the act as it is while Andhra Pradesh, Assam, Goa, etc. these states amended these laws and then implemented them.

Bridging Legislative Gaps in the Virtual Gaming Space

The concept of Real money gaming is where the participants wager the real money to win monetary rewards. This industry is rapidly growing creating lacunas as the pace of evolution of law is not same as that of the growth of this industry creating legal and regulatory uncertainties. With different state-specific laws and evolving judicial interpretation, the legality of Real money gaming has sparked contentious debates.

To lessen the confusion the Supreme Court has become the paving stone to enlighten and give clear judicial interpretation for easement of applicability of law. The Indian law divides the game into majorly two major categories game of skill and game of chance and the latter one is popularly known as gambling.

In the case of State of Andhra Pradesh V. K. Satyanarayana & Ors and State of Bombay V RMD Chamarbaugwala the Supreme Court had stated that the game of rummy is based on the principle of skill, unlike the three-card game called “Teen Patti Flush” which is a game of chance. Rummy is considered a game of skill because it requires certain amount of skills, especially in memorizing the sequence of falling cards and strategically holding or discarding the cards to build a strong hand. The Supreme Court asserted that any game involving the shuffling and dealing of cards inherently contains an element of chance due to the unpredictable distribution of cards in a shuffled deck. Article 19(1)(g) of the Constitution of India, which guarantees the freedom to practice any profession or engage in any occupation, protects such competitions, likening them to commercial activities.

At present time the Kerala High Court vide order dated 27 September 2021, held that the State government’s power under Entry 34 in List II of Schedule 7 to make laws legislating Betting and Gambling cannot include powers to regulate subjects/games that do not fall under “gambling”. Kerala High Court held that via decisions delivered by the Apex Court in Satyanarayana and K.R. Lakshmanan, games that require substantial skills cannot come under the ambit of gambling and therefore, the State cannot regulate or ban these games of mere skill. Thus, the Kerala High Court quashed the Kerala Government’s amendment to notification under the Kerala Gaming Act, 1960 which sought to ban online rummy.

Also, the Madras High Court had struck down Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 on 03 August 2021 which had imposed a ban on all forms of online gaming, which also included games of mere skill. The Madras High Court struck the enactment on three grounds:

1. The blanket ban on staking in games of skill was excessive, disproportionate, unreasonable, and manifestly arbitrary;
2. The enactment was violative of Article 19(1)(g) of the Constitution;
3. The enactment was not within the scope of legislative competence under Entry 34 of List II of Schedule VII to the Constitution

CONCLUSION

A significant change in India’s regulatory environment has been brought about by the Supreme Court’s historic decisions on real money gaming, which have acknowledged the validity of the sector while highlighting the necessity of impartial regulation. Although these choices lay the groundwork for future development, they also draw attention to the difficult task of balancing social duty with economic potential. Given the established worries about gaming addiction and its effects on vulnerable groups, the way forward necessitates striking a careful balance between encouraging innovation and putting protective measures in place. The establishment of a thorough framework that prioritizes public welfare through evidence-based rules and strong consumer protection mechanisms while encouraging industry expansion will be necessary for success.

The only question right now the law should answer is In a society where technology increasingly blurs the line between entertainment and risk, how do we define the boundaries of personal freedom when individual choices can have collective social consequences? When the boundary between entertainment and addiction becomes fluid, who bears the moral responsibility – the individual seeking excitement, the company providing the platform, or the society that sanctions it?

Author: VAHIN KAUL, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing

References

Cases

State of Bombay v. RMD Chamarbaugwala, AIR 1957 SC 699.

All India Gaming Federation v. State of Tamil Nadu, 2023 SCC OnLine Mad 6973

Avinash Mehrotra v. State of Rajasthan & Ors

Constitutional and Legislative References-

INDIA CONST. Sch. VII, List II, Entry 34, Entry 26.

The Information Technology Act, No. 21 of 2000, India.

THE PUBLIC GAMBLING ACT, 1867