Tamil Nadu Prohibits Online Gambling and Regulates iGaming Under Recently Passed Bill

Tamil Nadu Prohibits Online Gambling and Regulates iGaming Under Recently Passed Bill

The southern state of Tamil Nadu approved legislation to prohibit gambling and online games of chance. The state’s law minister, Sevugan Regupathy, introduced the bill on 26 October 2022.

The legislation will phase out iGaming platforms and regulate other online games, including poker and rummy. The Tamil Nadu government is yet to announce the date post which the law will be effective.

Bill to Replace Governor’s Ordinance

The Statement of Objects and Reasons of the Bill will replace an ordinance promulgated by the state’s governor, RN Ravi. The Tamil Nadu government passed it in September. The ordinance sought to ban and regulate iGaming in the region amidst concerns about the increasing number of suicides due to gambling addiction and significant monetary losses. Local media has been proactively reporting the loss of lives due to excessive online gambling.

A committee report detailed that a whopping 99% of Tamil Nadu’s public recommended that iGaming be prohibited in the state. The M.K.Stalin-led government deemed unregulated online gambling a vice that could result in other problems such as violent behavior, bad impacts on public health, and a disturbance in the law and order scenario.

The state government also surveyed the effects of iGaming on young pupils. About 74% of the teachers who participated in the survey reported that iGaming distracted students from their studies. Besides this, 67% of teachers mentioned that numerous students have strained eyesight due to the long hours they spend playing online games.

With numerous complaints being sent to the Tamil Nadu government, the ruling government decided that it was time for them to roll out legislation that would stop iGaming in the state.

iGaming Advocates Criticize Government’s Move

Advocates of iGaming criticized how the government placed games of skill like rummy and poker under the ambit of online games of chance. Noted gaming lawyers also pointed out that the state was ambiguous in determining whether online fantasy sports would fall under games of chance.

A report released by the judicial committee led by ex-High Court Justice K. Chandru mentioned that online games could not be compared with their offline counterparts. The report also noted that the State’s financial surveillance approves the use of virtual currencies and tokens used in remote gambling.

The panel raised the point that online gambling is usually controlled by a computer algorithm and features virtual players, which blur the distinction between games of chance and skill. Despite highlighting the problems with categorizing online games, the committee said that the connection between gambling and suicide was obvious and could impact both individuals and families.

Previously, the Madras High Court had struck down the Tamil Nadu Gaming and Police Laws (Amendment) Act of 2021 as unconstitutional in August 2021. The High Court said that since games like rummy have already been earmarked as a game of skill by the Supreme Court in 1968, the state cannot ban it. The court did not rule out the possibility of Tamil Nadu prohibiting certain iGaming activities via another law.

EGF to File Lawsuit Against Bill

As per legal experts, not only did the regulation fail to distinguish between the two types of games, but it also disrespected the Madras High Court’s 2021 judgment. The Tamil Nadu government’s courageous stance on prohibiting iGaming within the region was met with backlash from the E-Gaming Federation (EGF), a regulatory agency for gaming entities.

EGF CEO Sameer Barde said that the body would file a lawsuit against the bill as it does not comply with several courts’ directives to consider games of skill like rummy and poker as legitimate business activity. Barde also cited the Karnataka High Court’s 2022 verdict to back his claim that games of skill cannot be arbitrarily classified otherwise just because they involved any stakes or were played on the internet.

Lawyers said the recent bill defies established laws that differentiate between games of chance and skill. Experts believed various entities would challenge the bill in court in the following weeks. For many, the legislation is a disguised attempt to further previous initiatives that criminalized gambling and could direct players toward offshore sites.

The state’s government announced its intent to ban iGaming platforms from safeguarding public interest in March 2022. The government has already tried to pass a bill that outlawed online gambling. As per the legislation, any supplier cannot offer or permit gaming services that involve staking cash and pose financial risks.

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