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Tamil Nadu’s Online Gambling Ban Comes Into Effect: What Now for Gaming Companies?

The law came into effect despite the fact that courts across the country have upheld these games to be games of skill, which states can’t regulate.

With inputs from Sarvesh Mathi

Update on 2/5/2023 at 11:45 am: Classic Rummy’s services were blocked when we checked on April 27th. MPL was still available.

Original story published on 26/4/2023 at 11:58 am: Tamil Nadu’s much-awaited law banning “online gambling and games of chance” came into effect on April 21st, stated a gazette notification released a few days ago.

Why it matters: Introduced in the wake of rising gambling-related suicides in the state, the law explicitly outlaws online games like rummy and poker, among others, as “games of chance”. This is despite the fact that courts across the country have upheld these games to be games of skill, which states can’t regulate. Remember: states only have the power to regulate gambling games, or games of chance. Unsurprisingly, skill-based gaming industry associations are reportedly already gearing up to challenge the law in court.

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The bottom line for now: Gaming companies have to stop offering online games of chance and online gambling (as defined under Tamil Nadu’s law) in the state.

“Rummy Passion is our flagship game and Rummy has been ‘incorrectly’ banned under this state law passed by Tamil Nadu,” Bobby Garg, CEO of Passion Gaming, told MediaNama. “We have blocked access to Tamil Nadu players through geo fencing out of respect to the government direction to which we are not in agreement. Our IOS and Android Playstore are automatically aligned to the server-side Geo Fencing technology. The apps do not provide access to players from the state.” Garg added that the company’s terms and conditions have been updated to reflect restricted access. Rummy Passion was geo-restricted when we tried playing it after downloading it from the App Store and Play Store in Tamil Nadu yesterday.

According to a MoneyControl report, Classic Rummy, A23, Mobile Premier League (MPL), and Games 24×7 confirmed that they will be complying with the law. After requesting location access, A23 and Games 24×7’s Rummy Circle, downloaded from both stores, did not allow us to play online rummy in Tamil Nadu. As of publishing this report, we found that we were able to play online rummy with a money deposit on the Classic Rummy and MPL apps from the App Store in Tamil Nadu today. However, the websites for both note that playing rummy for cash is illegal in Tamil Nadu. Reports added that PokerBaazi has also restricted operations in the state.

Are app stores involved in blocking these games? We’re waiting for responses from Google and Apple on whether they also have compliance obligations to restrict access to “games of chance” under Tamil Nadu’s law. But based on their existing app store policies, the onus for restricting access to banned games currently seems to fall on the companies themselves:

  • Google’s Play Store: Last year, Google launched a pilot that allowed digital fantasy sports and rummy developers to host their apps on its Play Store. Participants are expected to restrict their apps in states or territories where digital fantasy sports and rummy are either prohibited or if the companies themselves don’t have the required license to offer the games in a state. “If any License you hold (now or in the future) is terminated in any Indian state or territory, you must immediately inform Google and restrict [user] access to your App,” the pilot’s policy adds. Among other factors, Google can terminate the participation of a developer if:
    • They breach the pilot’s terms and conditions;
    • If Google is required to do so by law;
    • If the developer’s app is subject to legal action or regulatory investigation; or
    • If the app “poses a potential risk of economic, reputational, or security-related harm to Google, users, or other third-party partners”.
  • Apple’s App Store: According to the App Store Review Guidelines, apps offering real money gaming or lotteries “must have necessary licensing and permissions in the locations where the app is used, must be geo-restricted to those locations, and must be free on the App Store. Illegal gambling aids, including card counters, are not permitted on the App Store. Lottery apps must have consideration, chance, and a prize.”

What do industry associations have to say? A similar ban was passed by the Tamil Nadu government earlier and struck down by the Madras High Court in 2021 for affecting these skill-based gaming companies’ right to do business in the state. The current law repeats some of its predecessor’s concerns, while also conflicting with the Indian government’s recently notified rules regulating online gaming, Malay Kumar Shukla, Secretary of the E-Gaming Federation (EGF), told MediaNama:

The fact that rummy and poker games are listed for prohibition as games of chance or gambling under this new legislation runs contrary to the decision of the Hon’ble Madras High Court and the Hon’ble Supreme Court. Furthermore, the legislation is also in direct conflict with the IT (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, amended on April 6, 2023, as notified by the MeitY, whereby the Government of India is seeking to regulate and grow the sunrise gaming sector.

As an industry, we have been unequivocal in our readiness for a progressive regulatory framework by the government. The E-Gaming Federation sent repeated requests and representations to the Tamil Nadu government exploring the possibility of establishing a framework that will regulate the gaming sector as a whole and the skill gaming sector in particular. However,  we as an industry were never given a chance to interact with the committee constituted by the government and present our side of the story. Our delegation also made representations to the honorable Governor of Tamil Nadu regarding the Bill banning Online Games in the state. The point raised on Random Number Generators (RNGs), was also clarified as these RNG softwares are used to ensure fairness in games are required by the most developed, internationally accepted regulatory practices and technical standards. These have been adopted by the skill gaming operators voluntarily in the country today. This ensures the safety of consumers as well as tamper-free operator practices. 

EGF has always reiterated the need for a strong regulatory mechanism that protects the players by promoting responsible gaming and helps the legitimate operators grow while weeding out the ones who break the law. We strongly believe that an extreme step like a ban would only help unscrupulous operators and encourage illegal gaming, leading to a detrimental impact on the very players the state Government seeks to protect.

Our skill gaming operator members are committed to operating in compliance with the laws and will accordingly take steps to ensure this as per the legal advise they receive.

This post is released under a CC-BY-SA 4.0 license. Please feel free to republish on your site, with attribution and a link. Adaptation and rewriting, though allowed, should be true to the original.

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