The issue pertains to a batch of pleas moved by online gaming companies challenging the ordinance passed by the state banning online games in November 2020. The court on Tuesday struck down the amendment, calling it unconstitutional, and said it is not against these games while stating that nothing in its order will prevent the government from introducing appropriate legislation on the issue conforming to Constitutional principles of propriety.
“The court has accepted that running online games falls under the right to carry on trade and commerce guaranteed under Article 19(1)(g) of the Constitution and has asked the state government to introduce a proportionate, balanced and least-intrusive legislation to regulate the online skill-gaming industry, if they so desire. The historic verdict is a boost for the nascent and burgeoning online gaming industry,” technology lawyer Jay Sayta who appeared in the online gaming matter told ET.
Sayta said the provisions, that have been struck down by the court, “obliterated the differentiation between games of skill and chance, which runs contrary to well-established jurisprudence laid down by the Supreme Court.”
The petitioners argued that they were running legitimate businesses across the country and if these games were permitted to be played offline, then why were they being banned online. The state government on their part contended that youngsters were losing large sums of their earnings and savings playing these games online. The government also said that when these games are played for stakes, it becomes gambling.
“The Madras High Court’s decision brings a great amount of relief and direction for both industry and government to work towards enabling regulations. It’s important for governments to engage with this sunrise industry and understand the various models and jointly formulate the way forward. Mere presence of money should not be held against this emerging industry and confused with betting and/or gambling,” Rameesh Kailasam, CEO, IndiaTech.org said.
Kailasam added that offline versions of these games when played online continue to require a prerequisite amount of skill which sets it aside from gambling and betting. Further, he said there are also constant efforts being made from the industry’s side to ensure that fraud prevention mechanisms are in place so that no one player gets an unfair advantage over others.
“We welcome the order of the Madras High Court which iterates that the Court is not against online gaming, and calls for the government to devise a regulatory framework to provide clarity to the sunrise online gaming industry with a view to encourage investments leading to technological advancements as well as generation of revenue and employment,” Roland Landers, CEO, All India Gaming Federation (AIGF) said.
In a statement, the AIGF said that with the exponential growth seen in the industry over the last 3 years and the addition of newer business verticals like digital eSports, the federation felt the need to strengthen its self-regulatory process by adopting compliance audits. To reinforce its self-regulation process, AIGF recently announced its partnership with Arthur D. Little (ADL), the oldest and world-renowned international management consulting firm. The association will help AIGF through extensive compliance audits for all its members, the federation said on Tuesday.