‘Every game has element of chance’ — why Madras HC quashed TN law banning online rummy, poker

Calling the recent amendment ridiculous, the Madras HC called out the blanket ban imposed by the legislation on all games with the slightest of stakes or any form of prize.

Representational image | Pixabay

New Delhi: In February this year, the Tamil Nadu government amended the Tamil Nadu Gaming Act, 1930, banning online games with stakes such as rummy and poker. However, the Madras High Court Tuesday struck down the law, observing that it will have the “most ridiculous and unwanted” result if applied in letter and spirit.

The court observed that the framing of the Tamil Nadu Gambling and Police Laws (Amendment) Act, 2021, passed by the AIADMK government, applies to physical games as well and will effectively outlaw them if they are played for the slightest of stakes or any form of prize.

“The amended Act encompasses within its sweep all sporting activities, if played for a prize, whether between two class teams in a school or between two schools in an inter-school competition, if there is a trophy to be won; leave alone the ATP prize-money or ranking tournaments organised in the city. Goodbye to IPL and Test matches, too, from Tamil Nadu since cash rewards are offered therein,” said a bench of Justices Sanjib Banerjee and Senthilkumar Ramamoorthy.

The judgment, which was delivered on a batch of petitions challenging the law, also noted that the “wide-ranging” blanket ban by the legislation did not pass the ‘least intrusive test’ and thereby violated Article 19 (1) (g) of the Constitution that grants an individual the right to practice any profession. According to the least intrusive principle, if the government brings in a law to restrict the fundamental rights of a citizen, it must employ “the least restrictive measures” to achieve its goal.

Furthermore, the court observed that the state had failed to present any scientific justification on why such a law was needed, apart from anecdotal reference to some suicides and “subjective perception of the evil of addiction”.

In the absence of any empirical study, the HC said, the legislation was borne out of a “sense of morality” and “bid to play to the galleries” in election season.

“That the Bill faced no opposition in the House has more to do with the optics just ahead of the State elections,” it added.

Game of skill and chance

A primary contention against the law was that it disregarded multiple Supreme Court judgments which state that games of skill were business activities and thus protected under Article 19 (1) (g) of the Constitution.

Games of skill have been judicially differentiated in the country from games of chance. According to the petitioners, states do not have legislative competence over games of skill but can regulate games of chance.

The earlier law, they noted, did not apply to games of skill but the amendment expanded the definition of ‘gaming’ to include them. It imposed a blanket, disproportionate and excessive prohibition on all virtual games if it is played for a wager, bet, money or any other stake, specifically the card games rummy and poker, the petitioners noted.

On whether poker and rummy qualify as games of skill, the HC bench observed that both games “involve considerable memory, working out percentage, the ability to follow the cards on the table and constantly adjust to the changing possibilities of the unseen cards”.

It noted that while poker may not have been recognised as a game of skill in any previous judgment, evidence from the Law Commission’s 276th report proves that poker can be considered as a game that requires skill.

Titled ‘Legal Framework: Gambling and Sports Betting Including in Cricket in India’, the 276th report of the Law Commission, submitted in 2018, recommended legalising and regulating betting and gambling.

History of upsets in all games

The judges also delved briefly into the history of gambling and how it has been judicially interpreted over the years.

Every game or like activity depends on an element of chance, the court said.

Sporting activities, whether boxing or football, are replete with upset results with outcomes contrary to ordinary expectations, it added.

“..it is the hope of a different outcome than what is predicted that impels the underdog and results in instances like the Rumble in the Jungle of 1974 or of, arguably, the greatest upset in football history at Belo Horizonte in 1950 or in the felling of the mighty West Indies at Lords in 1983 (by the Indian cricket team),” the court noted.

Rumble in the Jungle was a historic fight between US boxers Muhammad Ali and George Foreman in October 1974 in Zaire (now Democratic Republic of Congo) where the former reclaimed the world heavyweight title. Meanwhile, the 1950 match in Belo Horizonte between the US and UK is considered to be the greatest upset in football history with an underdog US team defeating the UK, a tournament favourite, at the FIFA World Cup.

From a betting perspective, the court added, if the odds favouring an outcome are guided more by skill than chance then it will be a game of skill.

“The chance element can never be completely eliminated for it is the chance component that makes gambling exciting and it is the possibility of the perchance result that fuels gambling,” the court observed.

It further said that people should be free to exploit their skills and only reasonable restrictions that do not completely take away their chance to show off or make a living out of their skills may be permissible.

‘Uncontrollable and chaotic jungle’

The petitioners also brought up the state’s “degree of paternalism” and sense of morality that came with the enactment of the legislation. On both counts, they said, the statute must satisfy the test of reasonableness under Article 14 (Right to Equality) and the right to carry on with a trade.

In its defence, the state had submitted that the law was brought into force after multiple instances of suicides were reported because of the addictive tendency of these games and the financial losses associated with them.

It further claimed that statistics suggested that the target audience for these games are the young and uneducated as the games offer “easy incentives” like cash prizes.

The state also maintained that there “cannot be absolute right to practise any profession or to carry on any activity, trade or business and they are subject to reasonable restrictions under the Constitution. All online games are invariably open to manipulation and, as such, no distinction needs to be made between games of chance and games of skill”.

Therefore, it contended, online games create an “uncontrollable or chaotic jungle.”

The Madras HC, however, noted that the state’s paternalistic role often brings a conflict between both the authority and the desirability on the state’s part to act as a guardian and protector of its citizens or classes of citizens who are perceived to be vulnerable in certain situations.

When a statute is attacked on the ground of overbearing paternalism, the court said, it is to assess whether the larger public good outweighs the interest of an individual who is being deprived of his choice.

Paternalistic legislation may regulate the conduct of an activity, but excessive paternalism on the part of the state “is another definition for authoritarianism and may even amount to repression”, particularly when a statute prohibits or restricts some activity, the court added.

(Edited by Rachel John)