New Delhi: Online games of skill involve “elements of expression”, can shape “thoughts which characterise all artistic expression”, and therefore enjoy “regulatable protection” under the Constitution that guarantees the right to freedom of speech and expression, the Karnataka High Court (HC) said Monday as it struck down an amendment to the Karnataka Police Act, 1963.
The 2021 amendment — enacted for the regulation of police force, maintenance of public order and prevention of gambling — made operating and participating in online fantasy games with monetary stakes a cognisable and non-bailable offence.
The verdict was delivered on a batch of petitions filed by various members of the online gaming industry, challenging the amendment as arbitrary, unconstitutional and lacking legislative competence.
The interactivity of online games does not cut “their status as expression, but enhances the expressive impact of a medium”, a bench of Chief Justice Ritu Raj Awasthi and Justice Krishna S. Dixit held. “Playing games creates a mood as an abstract art, apart from causing a subtle shaping of thoughts which characterises all artistic expression,” it added.
Therefore, online games of skill fall within the protective contours of Article 19(1)(a), which gives citizens the right to freedom of speech and expression, and Article 21 (right to life and liberty). The predicate for Article 19(1)(a) is poised to include not only artistic expression having an outward effect upon socio-political thought, but also inarticulate expression, having a predominantly inward effect, the court explained.
The bench further reiterated that online games having business characteristics are protected under Article 19(1)(g) that assures freedom to practise any profession, or carry on any occupation, trade or business, but subject to reasonable restrictions.
The court felt that the amended Act brings in a “blanket prohibition” with regard to playing games of skill, and fails to differentiate between games of “skill” and “chance”.
An absolute embargo “appears to be too excessive a restriction”, one that does not conform to the doctrine of proportionality, it held.
In view of earlier Supreme Court judgments, including a six-decade old verdict, as well as several HC rulings, the bench concluded that the penal law cannot be allowed to “consume online games of skill”.
According to the bench, the state had created a wholly new category of “medium-based regulation” when the change of medium per se does not alter the true nature and content of the games.
Arguments & counters
The petitioners in the case — all associated with online versions of games such as rummy, carrom, chess, pool, bridge, crossword, Scrabble and fantasy sports including cricket — had moved the HC last year, questioning the validity of Amendment Act that brought about substantial and sweeping changes to the Karnataka Police Act, 1963. The amended law came into force on 5 October, 2021.
The cumulative effect of the Amendment Act was that it criminalised playing or facilitating online games. Apart from making the offences cognisable and non-bailable, the changes made punishment more stringent.
The amendment introduced an expansive definition of ‘gaming’ under Section 2(7) of the police law by including all online games which involve all forms of wagering or betting. Furthermore, the definition of ‘wagering or betting’ itself was widened to encompass even a game of skill involving money or otherwise, but excluded horse racing subject to certain conditions, the petitioners contended.
The net effect of the amendment was that owners of online gaming houses, providers of online gaming facilities and players of online games, all were dubbed as offenders liable to be jailed and fined in terms of penal provisions, they further said.
The petitioners challenged the amendment on varied grounds, including it violating several constitutional rights such as Articles 21, 19(1)(a) and 19(1)(g).
It was not just an arbitrary legislation, but was a result of “excessive paternalism and populism”, as the modifications led to imposition of the state’s notion of morality, they contended.
The state sought to defend the move by claiming that the Amendment Act was enforced pursuant to an assurance given by it to the HC — when the latter was hearing a Public Interest Litigation (PIL) seeking a ban on all forms of online gambling and betting — that it would look into the issue.
To justify the new law, the state argued that the “menace” of cyber games had reached epic proportions in the preceding two decades, and that several persons had died by suicide and millions of families had been ruined due to the proliferation of online gaming platforms.
These arguments were apart from the state’s stand that it was not bereft of legislative competence to introduce the law. It also questioned the locus standi of the companies as petitioners. It said that the court cannot entertain a petition filed in anticipation of a likely police action.
‘State action suffers from vice of paternalism’
Upholding the petitioners’ case on all counts, the court held that online gaming activities played with stakes, if they predominantly involve skill, judgement or knowledge, partake the character of business activities, are entitled to constitutional protection by virtue of their recognition as businesses.
Such activities, the court said, are susceptible to reasonable restrictions, but not similar to the one imposed by the state government. And even if the state wants to impose excessive restrictions such as complete prohibition, then it should be able to justify such an extreme measure, it held.
In the case at hand, the court said the state could not place any material on record to demonstrate that while enacting such extreme measures, it had considered the feasibility of regulating wagering on games of skill.
“If the objective is to curb the menace of gambling, the state should prohibit activities which amount to gambling as such and not the games of skill which are distinct, in terms of content and produce. The state action suffers from the vice of paternalism since there is excessive restriction on the citizens’ freedom of contract,” the court held.
A mere likelihood or propensity of misuse of online gaming platforms, without anything more, does not constitute a legal justification for the banning of commercial activities, said the court, testing the prohibition on the touchstone of doctrine of proportionality.
‘Games involve psychology of relationships’
To the state’s vehement contention that several persons and families had been ruined because of online games, the court said it may be “arguably true”, yet this argument would not fit into the parameters of public order, one of the reasons often cited by a state to curtail constitutional rights that are subject to reasonable restriction.
The expression “public order” implies an activity which affects the public at large and therefore, individual instances that do not generate public disorder may not fit into the same, noted the court.
According to the judges, games involve “the psychology of relationships and variable patterns of behaviour that reveal the hidden feelings and emotions of individuals and their underlying motivations”.
Games, whether offline or online, have artistic and recreational value, and are designed to entertain as well as to inform, the court said, while explaining the contours of Article 19(1)(a) and constitutional protection given to artistic expressions.
“In any organised society, knowledge, wisdom, talent and skill are invaluable tools for wealth generation. They are the unseeming ingredients of economic rights such as rights to profession, property,” the court added.
State’s ‘scare argument’ not supported by data
It was agreed upon that with the exponential growth of internet and online gaming, people’s participation had increased, particularly the youth.
But the court did not accept the state’s “scare argument” of its deleterious effect without any empirical data to support such a claim. Regulation of online gaming based upon study and research will have to evolve to further the understanding of the impact of this mode of access, based on the experience and incidence of behavioural addictions and disorders, it said.
“This should be a data-driven exercise to be undertaken on empirical evidence. Theoretical models for betting and gaming and problem gambling have been developed on the basis of traditional gaming, largely not considering the recent emergence of internet modes,” the court said, adding that it is necessary to structure a more comprehensive and scientific understanding of how people develop gambling problems.
(Edited by Gitanjali Das)