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Tamil Nadu bans online bets, rummy and poker; exempts games of skill

Days after the Madras High Court first spoke up on online gambling in Tamil Nadu, the state government on November 20 passed an ordinance banning online gambling in the state, making wagering or betting, including playing rummy and poker, punishable by imprisonment of two years, a fine of up to ₹10,000, or both. 

The AIADMK government, led by Chief Minister Edappadi K Palaniswami, has cited young people being cheated and numerous suicides due to wagering online as prompting the ban. The chief amendments have been brought in by updating the colonial-era Tamil Nadu Gaming Act, 1930, to include cyber cafes and online fund transfers for online betting, alongside changes to the Chennai City Police Act, 1888, and Tamil Nadu District Police Act, 1859. Banwarilal Purohit, governor of Tamil Nadu, passed the ordinance on November 20; Chief Minister Palaniswami had first announced an intention to do so in early November. 

The ordinance makes several changes to include the internet as a space where gambling can take place, and increases punishments for running and opening a gaming house as well as making company executives liable. The Tamil Nadu Gaming and Police Laws (Amendment) Ordinance, 2020, makes the following changes:  

  1. Outlaws online betting, rummy, poker: No person shall wager or bet in cyberspace using computers, computer systems, networks, or resources, or any communication device used for gaming, or any other gaming instruments, “by playing rummy, poker or any other game”. This can be punishable with imprisonment of up to 2 years and a fine of up to ₹10,000 or both. The ordinance exempts games of skill from this provision.
  2. Include cyber cafes as common gaming houses: The amendment has added cyber cafes as common gaming houses where gaming or gambling activities can take place. It explicitly mentions that gaming “does not include lottery, but includes wagering or betting in person or in cyberspace”. 
    1. The Act makes owning, managing, or funding of a space used for gaming punishable by imprisonment of up to five years and fine of up to ₹5,000. Such spaces now include cyber cafes as well, per the ordinance.  
    2. Evidence of common gaming house: Any electronic records, computers, computer system, network, resource or any communications device can be used as evidence that a common gaming house was being run. In the earlier Act, this was limited to any cards, dice, gaming table or cloth, board, etc. 
    3. Penalty for opening a common gaming house has been increased from ₹500 and imprisonment of 3 months to ₹10,000 and 2 years respectively. 
  3. Wagering or betting includes collection of bets or receiving prizes via electronic transfers.
  4. Gaming instruments includes computers, and computer networks, system, resources or any communication device used for gaming; any document or electronic record used to register or record evidence of gaming and the proceeds or gaming; and any prize money including via electronic funds. 
  5. Warrant to enter a common gaming house for arrest and seizure: Earlier such a warrant could be issued by a Judicial Magistrate nor ranked below second class, or any Police Officer not below the rank of a Deputy Superintendent of Police. The amendment shifts this power solely to the police: to a police officer not ranked below DSP or Assistant Commissioner of Police.  Penalty for being found gaming or simply being present in the gaming house: Increased from fine of ₹200 and jail term of 1 month maximum to ₹5,000 and jail term of 6 months
  6. Make company executives liable: If an offence under the Act is committed by a company, every person that was in-charge of company business shall be deemed guilty and liable for punishment.

The original Act exempted games of skill from any punitive measures and essentially did not consider games of skill as gambling. This exemption has now been exempted to games of skill played online, which now include (as per jurisprudence in high courts) fantasy gaming services. This could possibly mean that investing real-money into fantasy teams on Dream11, MyCircle11, and other similar services, may not fall under this ordinance and can continue to be offered in the state. It’s worth noting that the Madras High Court is hearing a case wherein celebrities and crickets, including captain of India’s cricket team Virat Kohli and former cricket and current BCCI chief Sourav Ganguly, are endorsing fantasy gaming services.  

This case, along with one filed by S. Muthukumar against online rummy services, is what had prompted the Madras High Court (in recent weeks) to reiterate its demand for regulation or prohibition of online gambling in the state.

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