Beyond Blanket Bans: Balancing Rights and Regulation in Online Gaming
Recently, the Tamil Nadu government’s established authority under the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 has released the Real Money Games Regulation, 2025 which has been challenged due to the unreasonableness of implementation of “Blank Hour” where no login can be made from 12 midnight to 5 in morning. The state has a history of imposing irrational bans and going contrary to the well-established precedents on online gaming. There is no robust framework for regulating online gaming rather disproportional bans are imposed on online games. The article will discuss the state’s rationale behind bans and its implications. Later, it critically explores the limitations and puts forth suggestions.
RATIONALE BEHIND BAN
To understand what bans on online gaming are based upon, a preliminary understanding of the difference between online gaming and online gambling is essential. The prominence of real-money gaming highlights why this distinction is crucial. There is a clear distinction between gaming and gambling. “Wagering or gambling, as defined in Black’s Law Dictionary (Sixth Edition) “involves, not only chance but a hope of gaining something beyond the amount played. Gambling consists of consideration, an element of chance, and a reward.”[1] Online Gaming which is based on mere luck and involves real money might form the subset of online gambling as the game can be purely based on chance with no element of skill. The Public Gambling Act, 1867[2] in section 2 provides power to the state governments in India to extend any provisions of the said act. Many States in India have from times attempted to ban online gaming, which prima facie looks like online gambling. Section 12 of The Public Gambling Act, 1867[3], provides that the Act does not apply to any game of mere skill. This has led the courts in India to make a distinction between the “Game of Skill” and the “Game of Chance”. In the case of State of A.P. v. K. Satyanarayana[4], The issue before the Court was whether rummy should be classified as a game of pure skill or one of chance. The Court stated, “In fact, in all games in which cards are shuffled and dealt out, there is an element of chance, because the distribution of the cards is not according to any set pattern but is dependent upon how the cards find their place in the shuffled pack. From this alone it cannot be said that Rummy is a game of chance and there is no skill involved in it.” The Aim of the judiciary, through various Judgments, has been unambiguously visible. However, States in India have not only banned real money games on the pretext that they are gambling but also games that are apparently games of skills just because they involve real money. Tamil Nadu government had also passed an ordinance to amend its law governing gaming which completely put a ban on game of skills. The Ordinance substituted section 11 of the Act, by Clause 8, Section 3A, which states, “Notwithstanding anything contained in this Act, sections 3A and sections 5 to 10 shall apply to games of mere skill, if played for wager, bet, money or other stake.”[5] Inserting ‘cyber-space’ by amending section 4 and circuitously putting emphasis on it, the ordinance made their intent plain that they want to amend the pre-existing Act to target online gaming. The objective of this amendment through ordinance, as stated by the State legislature, was to protect innocent people from the evils of online gaming. The State believes that online games like Poker and Rummy are addictive and they can even lead to suicides. However, this was held unconstitutional in the case of Junglee Games India Private Limited vs The State Of Tamil Nadu.[6] Addiction as a problem has formed a robust basis for the imposition of a ban on Online Gaming, for governments across the globe. China has released restrictions on in-app purchases to limit obsessive behaviour. Despite being aware of the Economic Shock that this might create in the gaming industry, the Chinese government did not hesitate to put these restrictions.[7] To Prevent the consequences that follow addiction, governments are ready to do whatever it takes. Ivan Su, an analyst at Morningstar opined that this could force publishers to redesign their game and re-formulate their monetisation strategies.[8] “Seven Tamil Nadu residents reportedly died by suicide this year following huge financial losses linked allegedly to online gaming.”[9] The deaths prompted the state to take such an action.
WHAT ARE THE IMPLICATIONS OF BAN?
With restriction follows ramifications. The state’s ban on online gaming is in conflict with certain rights given by the constitution and the values that we adhere to. The imposition of bans on real money games is disproportionate and exerts a strain on the gaming industry. It cuts short the profit that the gaming platform makes. “A joint report by Interactive Entertainment and Innovation Council and online gaming firm Winzo,”[10] tells us that, India’s mobile gaming market is expanding at the fastest pace, with the total annual revenue of the Indian gaming industry projected to nearly double from USD 3.1 billion in 2023 to USD 6 billion by 2028.[11] If disproportionate bans are allowed, it can significantly affect the huge potential the industry might display in numbers. The implications of bans are not limited to individual freedom, organisation’s rights, and revenue by industry but also inimical to the revenue generation of the states. The tax that the government is ready to impose on the gaming industry is an irony. If the goal of the state in imposing a ban on the games were to stop the addiction and pouring of the money resulting in people losing money then the state fails in achieving this goal. The chief of the gaming federation stated that Tamil Nadu’s ban on online games such as rummy and poker will primarily benefit unregulated and illegal market operators who promote illicit activities.[12] It is not beneficial entirely for people who are victims of the adverse outcomes of online gaming. “Unmesh Joshi, co-founder of Mumbai-based non-profit Responsible Netism, which promotes cyber wellness, said creating awareness about game addiction was essential as a ban alone would not help and many gamers engaged in criminal activities to fund their addiction.”[13] Imposing a ban cannot deter individuals who are addicted to gaming stop engaging in the game. Similarly, imposing a ban on login and banning certain applications for the residents of a particular state will only make the addicted find other illegal means to use the application. The ban, thus, encourages people to find other ways to engage and often these ways are more detrimental and the State might lack infrastructure to curb it. The country already experienced this when it banned a game on the pretext that it posed a threat to national security but people were soon found to be using it by all sorts of means possible. Thus, imposing bans would not make the addiction go.
While the governments are enthusiastic about curbing the addiction, they cannot go beyond acceptable limits. The legislators should keep in mind the doctrine of proportionality. On the other hand, loss in millions should form a concern but consequences that follow from real-money online games cannot be unseen. The challenge always lies in balance. There should be a balance between economic priorities and the health of citizens. To put a check on the consequences gaming companies can be made to strictly adopt. a mechanism to ensure that there is a check on spending and time. The government should ensure that no real-money game uses an AI algorithm that tricks humans and portrays itself as a game of skill but is purely based on an algorithm. Social media applications like Instagram have added features of reminders, they notify during midnight and suggest closing the application and taking a break as it is late. Gaming platforms too can produce personal dashboards on screens that show the money and time spent. Standard rules can be introduced like necessary parental controls for children, below the age of eighteen. For adults, above the age of eighteen but below the age of 21, the government can restrict real money games. The government can introduce rules on how to properly display and highlight the risks involved in any online game. There can be clear warnings while making a transaction which might help in limiting the spending. Gaming platforms should be mandated to embed links on their platform that provide access to help in dealing with addiction and other mental health consequences. The governments in an attempt to prevent the worst cases have exercised arbitrary imposition of bans which were later corrected by Courts. The industry needs rules and regulations and not bans. Legislators in India have not been able to keep up with the pace of tech advancements. India’s online gaming regulations are outdated and need reform similar to the UK’s centralized approach, which has successfully reduced gaming disorders and improved behaviour. The law must accommodate the needs of the growing time with a robust framework that balances between right of the parties and state’s interests.
[1] Lakshmikumaran & Sridharan, ‘Skill Versus Chance: A Saga of Online Gaming’ (Lakshmikumaran & Sridharan, 30 August 2024) https://www.lakshmisri.com/insights/articles/skill-versus-chance-a-saga-of-online-gaming/# accessed on 3 September 2024.
[2] The Public Gambling Act, 1867, s 2.
[3] The Public Gambling Act, 1867, s 12.
[4] 1967 SCC OnLine SC 333.
[5] Prohibition of Online Gambling and Regulation of Online Games Ordinance 2022, s 8(3A)
[6] Supra note 11
[7] BBC News, ‘AI Training Data: EU Wants to Limit Use of Web Data’ (4 September 2024) https://www.bbc.com/news/technology-678
Recently, the Tamil Nadu government’s established authority under the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 has released the Real Money Games Regulation, 2025 which has been challenged due to the unreasonableness of implementation of “Blank Hour” where no login can be made from 12 midnight to 5 in morning. The state has a history of imposing irrational bans and going contrary to the well-established precedents on online gaming. There is no robust framework for regulating online gaming rather disproportional bans are imposed on online games. The article will discuss the state’s rationale behind bans and its implications. Later, it critically explores the limitations and puts forth suggestions.
RATIONALE BEHIND BAN
To understand what bans on online gaming are based upon, a preliminary understanding of the difference between online gaming and online gambling is essential. The prominence of real-money gaming highlights why this distinction is crucial. There is a clear distinction between gaming and gambling. “Wagering or gambling, as defined in Black’s Law Dictionary (Sixth Edition) “involves, not only chance but a hope of gaining something beyond the amount played. Gambling consists of consideration, an element of chance, and a reward.”[1] Online Gaming which is based on mere luck and involves real money might form the subset of online gambling as the game can be purely based on chance with no element of skill. The Public Gambling Act, 1867[2] in section 2 provides power to the state governments in India to extend any provisions of the said act. Many States in India have from times attempted to ban online gaming, which prima facie looks like online gambling. Section 12 of The Public Gambling Act, 1867[3], provides that the Act does not apply to any game of mere skill. This has led the courts in India to make a distinction between the “Game of Skill” and the “Game of Chance”. In the case of State of A.P. v. K. Satyanarayana[4], The issue before the Court was whether rummy should be classified as a game of pure skill or one of chance. The Court stated, “In fact, in all games in which cards are shuffled and dealt out, there is an element of chance, because the distribution of the cards is not according to any set pattern but is dependent upon how the cards find their place in the shuffled pack. From this alone it cannot be said that Rummy is a game of chance and there is no skill involved in it.” The Aim of the judiciary, through various Judgments, has been unambiguously visible. However, States in India have not only banned real money games on the pretext that they are gambling but also games that are apparently games of skills just because they involve real money. Tamil Nadu government had also passed an ordinance to amend its law governing gaming which completely put a ban on game of skills. The Ordinance substituted section 11 of the Act, by Clause 8, Section 3A, which states, “Notwithstanding anything contained in this Act, sections 3A and sections 5 to 10 shall apply to games of mere skill, if played for wager, bet, money or other stake.”[5] Inserting ‘cyber-space’ by amending section 4 and circuitously putting emphasis on it, the ordinance made their intent plain that they want to amend the pre-existing Act to target online gaming. The objective of this amendment through ordinance, as stated by the State legislature, was to protect innocent people from the evils of online gaming. The State believes that online games like Poker and Rummy are addictive and they can even lead to suicides. However, this was held unconstitutional in the case of Junglee Games India Private Limited vs The State Of Tamil Nadu.[6] Addiction as a problem has formed a robust basis for the imposition of a ban on Online Gaming, for governments across the globe. China has released restrictions on in-app purchases to limit obsessive behaviour. Despite being aware of the Economic Shock that this might create in the gaming industry, the Chinese government did not hesitate to put these restrictions.[7] To Prevent the consequences that follow addiction, governments are ready to do whatever it takes. Ivan Su, an analyst at Morningstar opined that this could force publishers to redesign their game and re-formulate their monetisation strategies.[8] “Seven Tamil Nadu residents reportedly died by suicide this year following huge financial losses linked allegedly to online gaming.”[9] The deaths prompted the state to take such an action.
WHAT ARE THE IMPLICATIONS OF BAN?
With restriction follows ramifications. The state’s ban on online gaming is in conflict with certain rights given by the constitution and the values that we adhere to. The imposition of bans on real money games is disproportionate and exerts a strain on the gaming industry. It cuts short the profit that the gaming platform makes. “A joint report by Interactive Entertainment and Innovation Council and online gaming firm Winzo,”[10] tells us that, India’s mobile gaming market is expanding at the fastest pace, with the total annual revenue of the Indian gaming industry projected to nearly double from USD 3.1 billion in 2023 to USD 6 billion by 2028.[11] If disproportionate bans are allowed, it can significantly affect the huge potential the industry might display in numbers. The implications of bans are not limited to individual freedom, organisation’s rights, and revenue by industry but also inimical to the revenue generation of the states. The tax that the government is ready to impose on the gaming industry is an irony. If the goal of the state in imposing a ban on the games were to stop the addiction and pouring of the money resulting in people losing money then the state fails in achieving this goal. The chief of the gaming federation stated that Tamil Nadu’s ban on online games such as rummy and poker will primarily benefit unregulated and illegal market operators who promote illicit activities.[12] It is not beneficial entirely for people who are victims of the adverse outcomes of online gaming. “Unmesh Joshi, co-founder of Mumbai-based non-profit Responsible Netism, which promotes cyber wellness, said creating awareness about game addiction was essential as a ban alone would not help and many gamers engaged in criminal activities to fund their addiction.”[13] Imposing a ban cannot deter individuals who are addicted to gaming stop engaging in the game. Similarly, imposing a ban on login and banning certain applications for the residents of a particular state will only make the addicted find other illegal means to use the application. The ban, thus, encourages people to find other ways to engage and often these ways are more detrimental and the State might lack infrastructure to curb it. The country already experienced this when it banned a game on the pretext that it posed a threat to national security but people were soon found to be using it by all sorts of means possible. Thus, imposing bans would not make the addiction go.
SUGGESTIONS
While the governments are enthusiastic about curbing the addiction, they cannot go beyond acceptable limits. The legislators should keep in mind the doctrine of proportionality. On the other hand, loss in millions should form a concern but consequences that follow from real-money online games cannot be unseen. The challenge always lies in balance. There should be a balance between economic priorities and the health of citizens. To put a check on the consequences gaming companies can be made to strictly adopt. a mechanism to ensure that there is a check on spending and time. The government should ensure that no real-money game uses an AI algorithm that tricks humans and portrays itself as a game of skill but is purely based on an algorithm. Social media applications like Instagram have added features of reminders, they notify during midnight and suggest closing the application and taking a break as it is late. Gaming platforms too can produce personal dashboards on screens that show the money and time spent. Standard rules can be introduced like necessary parental controls for children, below the age of eighteen. For adults, above the age of eighteen but below the age of 21, the government can restrict real money games. The government can introduce rules on how to properly display and highlight the risks involved in any online game. There can be clear warnings while making a transaction which might help in limiting the spending. Gaming platforms should be mandated to embed links on their platform that provide access to help in dealing with addiction and other mental health consequences. The governments in an attempt to prevent the worst cases have exercised arbitrary imposition of bans which were later corrected by Courts. The industry needs rules and regulations and not bans. Legislators in India have not been able to keep up with the pace of tech advancements. India’s online gaming regulations are outdated and need reform similar to the UK’s centralized approach, which has successfully reduced gaming disorders and improved behaviour. The law must accommodate the needs of the growing time with a robust framework that balances between right of the parties and state’s interests.
Author:– Uma Pareek, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing.
[1] Lakshmikumaran & Sridharan, ‘Skill Versus Chance: A Saga of Online Gaming’ (Lakshmikumaran & Sridharan, 30 August 2024) https://www.lakshmisri.com/insights/articles/skill-versus-chance-a-saga-of-online-gaming/# accessed on 3 September 2024.
[2] The Public Gambling Act, 1867, s 2.
[3] The Public Gambling Act, 1867, s 12.
[4] 1967 SCC OnLine SC 333.
[5] Prohibition of Online Gambling and Regulation of Online Games Ordinance 2022, s 8(3A)
[6] Supra note 11
[7] BBC News, ‘AI Training Data: EU Wants to Limit Use of Web Data’ (4 September 2024) https://www.bbc.com/news/technology-67801091 accessed 7 September 2024.
[8] ‘China to Increase Curbs on Video Gaming Industry’ <https://www.bbc.com/news/technology-67801091> accessed 4 March 2025.
[9] Sarkar S and Sarkar S, “Playing for Lives: Indian State Bans Online Gaming over Addiction Fears but Industry Cries Foul” South China Morning Post (October 24, 2022) https://www.scmp.com/week-asia/politics/article/3197090/playing-lives-indian-state-bans-online-gaming-over-addiction-fears-industry-cries-foul, (accessed on 28 August 2024).
[10] Interactive Entertainment and Innovation Council and Winzo, India Gaming Market Report 2024 – Robust Fundamentals To Power Continued Growth (2024).
[11] Pti, “Note Floated to Seek Distinction between Online Game of Skill, Game of Chance for FDI: Official” The Economic Times (August 20, 2024) https://economictimes.indiatimes.com/news/economy/policy/note-floated-to-seek-distinction-between-online-game-of-skill-game-of-chance-for-fdi-official/articleshow/112652929.cms?from=mdr
[12] Sarkar S and Sarkar S, “Playing for Lives: Indian State Bans Online Gaming over Addiction Fears but Industry Cries Foul” South China Morning Post (October 24, 2022) https://www.scmp.com/week-asia/politics/article/3197090/playing-lives-indian-state-bans-online-gaming-over-addiction-fears-industry-cries-foul (accessed on 13 august 2024)
[13] Supra
01091 accessed 7 September 2024.
[8] ‘China to Increase Curbs on Video Gaming Industry’ <https://www.bbc.com/news/technology-67801091> accessed 4 March 2025.
[9] Sarkar S and Sarkar S, “Playing for Lives: Indian State Bans Online Gaming over Addiction Fears but Industry Cries Foul” South China Morning Post (October 24, 2022) https://www.scmp.com/week-asia/politics/article/3197090/playing-lives-indian-state-bans-online-gaming-over-addiction-fears-industry-cries-foul, (accessed on 28 August 2024).
[10] Interactive Entertainment and Innovation Council and Winzo, India Gaming Market Report 2024 – Robust Fundamentals To Power Continued Growth (2024).
[11] Pti, “Note Floated to Seek Distinction between Online Game of Skill, Game of Chance for FDI: Official” The Economic Times (August 20, 2024) https://economictimes.indiatimes.com/news/economy/policy/note-floated-to-seek-distinction-between-online-game-of-skill-game-of-chance-for-fdi-official/articleshow/112652929.cms?from=mdr
[12] Sarkar S and Sarkar S, “Playing for Lives: Indian State Bans Online Gaming over Addiction Fears but Industry Cries Foul” South China Morning Post (October 24, 2022) https://www.scmp.com/week-asia/politics/article/3197090/playing-lives-indian-state-bans-online-gaming-over-addiction-fears-industry-cries-foul (accessed on 13 august 2024)
[13] Supra
