The online gaming industry fate will be decided by Court of laws in the next few months but Centre has to play a bigger role ensuring to curb these games.
For the last few years, during every IPL or cricket match, viewers are inundated with advertisements about real money skill-based games such as online daily fantasy sports, poker and rummy. A recent report by FICCI & EY states that transaction-based online gaming grew by 21% in 2020 and is expected to grow at a robust 27% year-on-year to reach Rs. 13,300 crores in revenues by 2023.
The laws passed by the states of Andhra Pradesh and Tamil Nadu have promptly been challenged by affected online rummy companies in the respective High Courts, with several rounds of hearings already held over the last few months.
Unconstitutional?
Several legal luminaries appearing for online gaming companies in both Madras and Andhra Pradesh High Courts argued at length for several hours attacking the amendments in the Andhra Pradesh and Tamil Nadu state gaming Acts banning all online games of skill, including rummy.
Further, they averred in court that previous rulings of the Supreme Court in the context of rummy played in recreational clubs and horse-racing (and betting thereof) to be games of skill bolster the claim that state governments cannot ban judicially recognised games of skill like rummy, chess and bridge, even if played for stakes, under gambling statutes.
Additionally, the online gaming companies have questioned the competence of the state governments to frame laws on online games. They contend that although framing laws on gambling and betting falls under the state list as per the constitution, since games of skill fall outside the ambit of gambling, states have no power to frame laws on the subject.
At best, they say, it is the central government under its power to legislate on posts, telegraph, wireless broadcasting and other form of communication (including internet) can regulate such games, but not completely ban them.
Thus, on grounds that the amendment to the gaming laws passed by the Andhra Pradesh and Tamil Nadu governments violates the fundamental rights to trade and commerce and equality guaranteed under the constitution as well as lack of legislative competence of state governments, online gaming companies want the amendments banning them to be struck down.
Both the Madras and Andhra Pradesh High Courts have heard the petitioner online gaming companies at length for several hours over the past few months.
Large Impact
Similarly, the Andhra High Court is also likely to hear the remaining arguments of the online gaming companies and submissions by the Advocate General and his team post the court holidays, in June or July, and after conclusion of all arguments, it may pass its final judgment within the next few months.
The expected judgments of Madras and Andhra High Courts will have widespread ramifications for the online gaming industry. If the High Courts decide to rule in favour of the online rummy companies, not only will the operators be allowed to resume their operations in the two southern states, which contribute over 40 per cent of pan-India revenues of online rummy companies, but it may also help in the perception battle and turn the regulatory tide in favour of online gaming.
It has been reported that the state governments of Rajasthan, Uttar Pradesh, Karnataka and Gujarat, among others, are also contemplating laws on similar lines to prevent and ban all forms of online gambling and games played for stakes.
A High Court decision that rules such state action as unconstitutional will certainly compel such states trying to bring similar legislative measures to a re-think. On the other hand, if the High Court gives a green signal to the legislations and finds no fault in them, similar bans on real-money online gaming companies by other state governments may be accelerated, spelling death-knell for the industry.
Of course, the High Court judgments on the issue may not be the final word and is unlikely to bring closure to the debate on the legality of online real-money games, as the losing side (either the state or online gaming companies) are likely to appeal the decision to the Supreme Court, which will have to finally pass a definitive ruling on the issue within the next couple of years. An authoritative and reasoned verdict of the apex court will finally bring an end to the debate on whether skill-based games enjoy constitutional protection or can be banned by respective state governments. #KhabarLive #hydnews
(Dislaimer: The writer Jay Satya is a lawyer, policy consultant on online gaming matters. Views expressed are personal.)
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