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Business News/ Companies / News/  Online betting firms welcome Madras HC judgment, but remain wary of state action

Online betting firms welcome Madras HC judgment, but remain wary of state action

A day after the HC order was passed, the TN govt said it will introduce a new law to ban online gaming platforms

Tamil Nadu wants to shield the youth from online gaming.mintPremium
Tamil Nadu wants to shield the youth from online

The Madras High Court order on 3 August, striking down an amendment to the Tamil Nadu Gaming Act, which banned all online gaming firms, brings some relief to the online gaming sector as it is expected to influence other states that were contemplating similar laws to regulate the platforms.

Though the industry welcomed the judgment, it may not end its concerns just yet. Gambling is a state subject in India and state governments will be framing their own laws that will be legally tenable.

“We welcome the forward-looking judgment. We sincerely hope that this will set the tone to establish a robust regulatory framework for the online gaming sector," said Sameer Barde, chief executive, The Online Rummy Federation. “We will be keen to collaborate and support the government of Tamil Nadu in developing a comprehensive regulation, which will address all issues of the state, citizens and the sector alike," he added.

However, just a day after the order was passed, Tamil Nadu law minister S. Raghupathy said the government will formulate a new legislation to ban online gaming platforms.

“Although the government put forth its views on the ban on online games, the high court said the government did not specify enough reasons when the law was made and without formalizing the rules, online gaming cannot be banned," he said in a statement. The observations by the high court may, however, put the state government on the back foot.

The high court said the state used “expansive definition" for gaming and games of skill such as rummy was brought under its purview. This will eliminate the chance for individuals to display their skills, “however little".

“Section 11 of the amended Act, indeed, turns the existing statute on its head, as the petitioners complained. What was once the exemption or escape provision has now been given the most claustrophobic stranglehold and has the possibility of bringing about the most ridiculous and unwanted results if applied in letter and spirit," the court added.

According to Sameer Jain, managing partner, PSL Advocates and Solicitors: “The judgment is in sync with the law laid down by the Supreme Court. However, the ultimate power to pass a law, even overriding the court’s decision, is well within legislative doma-ins. The government’s argument is based on the mischief theory whereby it plans to ban it due to its impact on youth. In my opinion, it cannot be the basis to declare, something otherwise legal, as illegal."

“It will be against the spirit of the high court’s order and Supreme Court orders," said Jay Sayta, a lawyer who advises online gaming companies. However, he said states could still justify such a ban, but have to give legally valid reasons.

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Prasid Banerjee
An engineering dropout, Prasid Banerjee has reported on technology in India for various publications. He reports on technology through text and audio, focusing on its core aspects, like consumer impact, policy and the future.
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Updated: 06 Aug 2021, 01:35 AM IST
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