History of Tamil Nadu Gaming Laws and breakdown of Play Games 24*7 v. State of Tamil Nadu & Ors.

by Anushree Rauta (Equity Partner, Head of Media and Entertainment Practice) and Umang Sheth (Senior Associate) and Savan Dhameliya ‎ (Associate)

INTRODUCTION

The Madras High Court in Play Games 24×7 Private Limited v. State of Tamil Nadu and Ors.,¹ on 3 June 2025, upheld the constitutional validity of the recently introduced Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025 (“TN Regulations”).

The bench, comprising Hon’ble Justice S.M. Subramaniam and Hon’ble Justice K. Rajasekar, dismissed a batch of writ petitions which challenged the constitutional validity of the TN Regulations, along with Section 5(2) read with Section 14 (1) (c) of the Tamil Nadu Prohibition of Online Gaming and Regulation of Online Games Act, 2022 (“TN Act”).

The writ petitions were filed by online gaming companies, player associations, and an individual player who contended that the State lacked legislative competence, and that the challenged laws infringed their fundamental rights under Articles 14, 19(1)(g), and 21. The petitioners prayed for declaring Section 5 (2) read with Section 14 (1) (c) of the TN Act along with Regulations 4 (iii) and Regulation (viii) of the TN Regulation as arbitrary, void, illegal and unconstitutional, in so far as its application to online games of skill played with money or other stakes.

HISTORY OF TAMIL NADU GAMES:

Timeline	Provision Introduced	Particulars
February, 2021	Tamil Nadu Gaming & Police Laws (Amendment) Act, 2021	The Tamil Nadu Government passed the Tamil Nadu Gaming & Police Laws (Amendment) Act, 2021 (“Tamil Nadu Amendment Act”) in February, 2021, by which the Tamil Nadu Gaming Act, 1930 was amended. The statute prohibited all forms of games being conducted in cyberspace, irrespective of the game involved being a game of mere skill, if such game is played for a wager, bet, money or other stake. The High Court of Madras in the judgement *Junglee Games India Private Limited v. The State of Tamil Nadu²* struck down the Tamil Nadu Amendment Act. It was held by the Court that games such as rummy, poker and other “Games of Skill’’ cannot be banned as they were not governed by chance and, therefore, fell under exceptions. The Court held that the blanket ban fell afoul of the right to practice any profession, or to carry on any occupation, trade or business which was a fundamental right under Article 19(1)(g) of the Constitution of India. While upholding the petition the High Court of Madras specified that rummy and poker can be understood to be “games of skill”.
October, 2022	Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022	The Tamil Nadu Government then passed the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022 (“Ordinance”) in October 2022, and subsequently the legislative assembly introduced a bill to replace the Ordinance. The Tamil Nadu governor returned the bill on 6th March 2023 to the legislative assembly highlighting legislative incompetence. The assembly reintroduced the bill with no amendments on 23rd March 2023.
April, 2023	Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022	This bill was published in April 2023, and the Tamil Nadu government enacted the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 (“TN Gaming Act”), aimed at banning online gambling and real-money online games of chance within Tamil Nadu. The TN Gaming Act defined online gambling as wagering or betting online. Further, the Act provided a Schedule which contained all online games of chance. This Schedule included the games of rummy and poker. The Madras High Court in All India Gaming Federation v. The State of Tamil Nadu³ upheld the constitutional validity of the TN Gaming Act and struck down the Schedule which included rummy and poker as games of chance. The Court excluded games of skill (including rummy and poker) from the ambit of the prohibited games contemplated under the TN Gaming Act. The Supreme Court is set to review the Tamil Nadu government’s challenge against the High Court’s ruling.⁴
February, 2025	Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025	Following this, the State of Tamil Nadu released the TN Regulations introducing provisions restricting minors from accessing real money games, mandating Aadhaar-based KYC for players, and banning real money games during “blank hours” from 12 AM to 5 AM.

RELEVANT PROVISIONS OF THE TN REGULATIONS AND TN ACT CHALLENGED BY THE PETITIONERS:

Under the TN Act, the following sections were challenged:

Section 5(2) of the TN Act: Empowers the Authority to make specific regulations concerning: Imposing restrictions such as time limits, monetary limits, or age restrictions related to playing online games.
Section 14(1)(c) of the Act: Prohibits non-local online games providers from allowing the playing of any online game in the State if it violates the applicable regulations or restrictions of the State of Tamil Nadu.

Under Regulation 4 of the TN Regulations, real money gaming companies have to adhere to strict regulations in the State of Tamil Nadu to ensure responsible gaming practices, such as age restrictions, mandatory KYC verification, session time alerts, spending limits and pop-ups for total amount spent so far whenever money is deposited, addiction warnings, and blank hours. The following regulations were challenged by the petitioner:

Regulation 4(iii) of the TN Regulations: KYC verification was made mandatory under this regulation for initial login with Aadhaar card details of the players, followed by a second-layer authentication via a One-Time Password (OTP)sent to their Aadhar registered phone number.
Regulation 4(viii) of the TN Regulations: A mandatory “blank hours” period was imposed under this regulation, from 12 AM to 5 AM, which was to be followed by real money gaming platforms, and during such “blank hours”, players would not be allowed to log in to play any games on the real money gaming platforms.

ISSUES:

The Madras High Court analyzed the issues of whether Section 5 read with Section 14 of the TN Act along with the TN Regulations are bound to be struck down for being:

beyond the legislative competence of the State Legislature;
violative of the Petitioners’ statutory, constitutional, and fundamental rights including under Articles 14, 19(1)(g),and 21 of the Constitution of India and;
in conflict with central laws, more specifically where the central laws are already framed and existing.⁵

LEGISLATIVE COMPETENCE OF STATE LEGISLATURE:

Res Judicata:

Contentions – On petitioners challenging the validity of the TN Act, the Court was informed that validity of certain provisions in the TN Act impugned in the present writ petition was already upheld by the Division Bench of Madras High Court in All India Gaming Federation.⁶ The Court therein had held that State is competent to legislate to the extent of prohibiting games of chance and regulating games of skill. The Court had also rejected the petitioner’s plea to declare the entire TN Act void, and instead only set aside the Schedule of the TN Act which contained rummy and poker as games of chance. The TN Act was interpreted to apply only to games of chance. It was also held that: “The State may make regulations as contemplated under Section 5 of the impugned Act, thereby providing reasonable regulations for the time limit, age restriction or such other restrictions in regard to playing of online games.”

Observation of the Court – Taking note of this case, the Court noted that the issue was already settled by the Division Bench of the High Court, upheld the power of the State Government under Section 5 of the TN Act. It was, therefore, held that the legislative competence of the State Government to regulate the online games of skill had already been upheld in All India Gaming Federation. Therefore, the Court observed that the present writ petitions were barred by ‘res judicata’.

Competence As Per The Constitution:

Contentions – The contention of the Petitioners on this ground was that Sections 5 and 14 of the TN Act and the TN Regulations with respect to online real money games were bound to be struck down as it was beyond the legislative competence of the State Legislature. Petitioners argued that online real money games offered via digital platforms fall under Entry 31 of List I of the Constitution, which deals with communication-related subjects like internet and broadcasting, and hence only the Union can legislate on it, not the States.

Observation of the Court – The Court clarified that Article 246 of the Constitution of India confers exclusive power on Parliament and the State Legislature to legislate with respect to the matters provided for in the Union List and the State List in Schedule VII respectively.

The Court observed that both the Union and State Governments have legislative authority over distinct subjects under the Constitution’s Seventh Schedule. While the Union derives its power to regulate online gaming intermediaries under The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021 (as also amended in2023) (“IT Rules”), from Entries 31 and 42 of List I (dealing with communications and inter-State trade), the State’s power to regulate online real money games arises from Entries 6 and 26 of List II (public health and intra-State trade).Since these fall under separate Lists, there is no conflict or overlap; each legislature is operating within its domain.

Further, the Court clarified that the doctrine of repugnancy is not applicable here. The doctrine of repugnancy only arises “in a case where two inconsistent laws relate to a subject falling under the Concurrent List in the Seventh Schedule of the Constitution of India”.

The Court held that there is no in consistency as both laws stem from separate lists. The only legal question that may arise is whether either legislature has exceeded its authority, which would involve applying the doctrine of ultra vires. The Court held that the State is competent to legislate on online real money games,⁷ especially considering the public health risks identified in Tamil Nadu.

CONFLICT WITH CENTRAL LAWS:

Contentions of Petitioners – Petitioners contended that the State’s TN Regulations directly conflict with the Information Technology Act, 2000 (“IT Act”) and IT Rules, especially Rule 4A on online gaming, which already sets up a detailed central framework including due diligence, grievance redressal, age restrictions, and self-regulatory bodies for online games of skill.

It was further contended by the Petitioners that online real money games cannot be regulated by State, because it entrenched upon the Centre’s power to legislate in matters corresponding to information technology under Entry 31 of List I.

Analysis of the Court – The Court held that the State cannot be barred from enacting laws that, in pith and substance, deals with public health within the State which is a subject under the State List II. Online real money games such as rummy and poker are associated with public health risks in the State of Tamil Nadu, and therefore, in the opinion of the Court, the State has full competence to pass legislation to govern matters affecting public health.

The Court found no conflict with the IT Act. It was held that the provisions related to online gaming under IT Rules, 2021 were yet to take effect and remain unenforceable due to the check imposed in Rule 4B of the IT Rules. Given the harmful effects, such as negative health effects due to lack of sleep, nighttime usage problem and sleep deprivation, suicides due to loss of monies on online gaming (which were mentioned as 47 from 2019 to 2024 in the State of Tamil Nadu), and other negative effects flagged by the expert committee, including the existing regulatory vacuum, the Court held that the State’s action to frame the law was necessary and valid, as regulating trade is within its domain.

Even if there’s some incidental overlap with subjects in the Union List, the law remains valid as long as its core objective lies within the State’s legislative domain.

This doctrine of pith and substance prescribes that “if an enactment substantially falls within the powers expressly conferred by the Constitution upon the legislature which enacted it, it cannot be held to be invalid, merely because it incidentally encroaches on matters assigned to another legislature”. This has been affirmed in cases like Gallagher v. Lynn⁸ and Prafulla Kumar Mukherjee v. Bank of Commerce, Ltd.⁹

The Court also quoted Union of India v. Shah Goverdhan L. Kabra Teachers’ College,¹⁰ wherein it was reaffirmed that the entries in the Seventh Schedule’s three Lists should be interpreted broadly. They must be read harmoniously, without giving such a wide meaning to one that it makes another entry ineffective or redundant. Each entry should retain its relevance, even when read alongside others.

SELECTIVE TARGETING:

Contentions of Petitioners – Petitioners pointed out that there was selective targeting and unfairness as the TN Regulations only targeted online real money games by restricting them in the ‘blank hours’, but other online games and online entertainment such as OTT platforms, social media platforms could continue to operate during such blank hours.

Analysis of the Court – The Court drew a clear line between passive entertainment and real money gaming, noting that streaming platforms or online games involved fixed subscriptions or optional purchases with no financial stakes or risks attached. It was observed that the contention of the Petitioners that no blank hours was imposed by the State in watching movies on Netflix and Prime is unsustainable as there are no stakes involved. For casual games, the same did not push users toward reward-based risk. But online real money games were different because they operated on the hook of monetary rewards. Early wins in the online real money games could quickly spiral into repetitive play, fueled by dopamine highs, and lead players into financial losses.

The Court observed that India is still evolving in terms of digital literacy, economic awareness, and responsible internet use. In online real money games, unlike traditional offline games, players could not read opponents’ body language or observe physical cues, and therefore it puts them at a disadvantage, playing against systems that cannot be assessed using skill. These games operated without the structure, discipline, or professionalism of traditional sports or traditional board games.

The Court added that “Regulation becomes a priority to ensure the safety and protection of the general public and the actions of the government cannot be termed baseless or disproportionate.”¹¹

PROVISIONS BEING VIOLATIVE OF FUNDAMENTAL RIGHTS:

Contentions of Petitioners – The Petitioners had contended that the time restrictions should be flexible and tailored to individual users, and that imposing a fixed, one-size-fits-all time ban lacks justification, is arbitrary, and violates their right to carry on trade under Article 19(1)(g).

Analysis of the Court – The Court held that the “blank hours” restriction (12 am–5 am ban) under Regulation 4(viii) is not arbitrary. It is a reasonable restriction supported by expert reports on the addictive and harmful effects of late-night online real money gaming. The Court therefore upheld the night-time gaming ban as a reasonable restriction under Article 19(6), citing expert reports that linked late-night gaming to addiction, mental health crises, and even suicides. The Court observed that the harm from online real money games is more serious than the individual’s right to do business, and regulation is needed to protect the public.

AADHAR VERIFICATION CHALLENGES:

Contentions of Petitioners – The Petitioners challenged Aadhar-based authentication under Regulation 4(iii) of the TN Regulations, arguing that it was violative of the Aadhar Act, 2016. In the case of Justice K. S. Puttaswamy (Retd) v. Union Of India,¹² states that Aadhar Card can only be demanded for a purpose suggested through law which has State interest. Petitioners pointed out that the Reserve Bank of India permits multiple valid documents for know your customer (KYC) procedures, and making Aadhar the only option was arbitrary and exclusionary. They also argued that Aadhar isn’t reliable since even as minors can have it, it would defeat the purpose of enforcing age restrictions.

Analysis of the Court – The Court noted firstly that the Petitioners had themselves proposed Aadhaar as a precautionary tool to verify player age in All India Gaming Federation.¹³ In that judgement, on the State averring that there was no methodology to verify the age of the person playing, the Petitioners had responded that a person was required to submit his Aadhaar Card, and other precautionary measures to confirm he/she was 18 years old.

The Court firmly held that the petitioners’ arguments to dilute Aadhaar as a verification tool were unconvincing. It found no compelling reason to alter the requirement, especially when Aadhaar-based two-factor authentication provided a reliable and secure method to confirm player eligibility. Compared to other ID proofs, Aadhaar reduced the chances of manipulation or misuse.

The Aadhaar Act, 2016 permits usage under a legal framework if in the interest of the state it is justified. The Court didn’t see it as a privacy violation under Article 21, noting that the measure aimed to keep minors out and was permissible in public interest, as per the test laid out in ‘X’ v. Hospital ‘Z’.¹⁴ The Court made it clear that the fundamental right under Article 19(1)(g) can be reasonably restricted in public interest. The Court emphasized that “the State cannot remain a mute spectator when the population at large is exposed to serious physical, mental and financial risks due to a constant exposure to a specific online entertainment/games/trade. In circumstances where a total prohibition is not possible at least a minimum of regulation becomes a necessity”.

CONCLUSION:

Tamil Nadu’s journey with gaming laws has moved rightly from banning of real money online games of skill, to now choosing to regulate real money online games of skill. Earlier, the State had attempted to ban games like rummy and poker if they involved money, which have been declared to be games of skill, but the Courts had struck them down saying such games of skill cannot be considered as gambling and therefore a complete ban would not be permissible. Over time, the State of Tamil Nadu has attempted to change its current outlook and instead come back with TN Regulations with not to ban, but to control the risks involved in real money games of skill.

The recent judgment therefore played the perfect role, in focusing on real problems like addiction, health issues, and financial loss related to online games of skill. The Court upheld the State’s power to bring in the TN Regulations to mandate age checks, to mandate Aadhaar KYC, and to restrict gaming during the blank hours of 12AM to 5AM. The Court made it clear that regulating these real money online games of skill is necessary, especially when they involve real money and risk, including cases of suicides, and that the State can step in to protect people.

From the gaming industry perspective, complying with multiple state regulations can be a complex and challenging task. A uniform and harmonized gaming laws across India are crucial for the growth and development of the gaming industry. A consistent regulatory framework would provide clarity and certainty for gaming companies, enabling them to comply with rules and regulations more efficiently. This, in turn, would foster favorable business environment, attract investment, and promote innovation. By adopting a unified approach to gaming regulation, India can unlock the full potential of its gaming industry, ensuring a win-win situation for both the industry and the country.

It can therefore be said that the way forward is not banning games of skill but regulating them in India and especially in the states where real money gaming is restricted.

Footnotes

1 W.P. No. 6784, 6794, 6799, 6970, 8832 and 13158 of 2025

2 W.P. Nos. 18022 of 2020

3 SCC Online Mad 6973

4 Stay Application, WMP.12944/2023, Diary No. – 54028/2023

5 Para 18 of Play Games 24×7 Private Limited v. State of Tamil Nadu and Ors.

6 Supra 3

7 Para 26, Ibid

8 1937 AC 863

9 1947 SCC OnLine FC 5[

10 (2002) 8 SCC 228

11 Para 42 of Play Games 24×7 Private Limited v. State of Tamil Nadu and Ors.

12 2019 (1) SCC 1

13 Supra 3

14 (1998) 8 SCC 296

History of Tamil Nadu Gaming Laws and breakdown of Play Games 24*7 v. State of Tamil Nadu & Ors.