All India Gaming Federation (AIGF), a skill gaming industry body along with pay-to-play gaming firms Gameskraft, Games24x7, and Head Digital Works moved to the Madras High Court, challenging the constitutionality of the Tamil Nadu government’s online gambling law that became effective on April 21, Moneycontrol has learnt.

AIGF in a writ petition has asked for interim relief for the impugned Act known as Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022.

The industry body has additionally looked for the court to pronounce the law unconstitutional since it is missing legislative competence and is disregarding the Constitution. The high court has consented to hear the cases on April 27.

The prohibition of online rummy and poker by the Tamil Nadu government in the southern state recently named them as online games of chance in the legislation, categorizing them under the domain of online pay-to-earn (pay-to-earn is a state subject in India).

On April 24 Moneycontrol revealed that a few online platforms of rummy and poker including A23, Classic Rummy, RummyCircle, and PokerBaazi, suspended users from playing paid games in Tamil Nadu.

The industry executives told Moneycontrol that Southern India is an important market for skill-based games like rummy, which has a critical entrance in these states.

AIGF CEO Roland Landers told Moneycontrol that they have challenged the constitutionality of the law since it “disregards over six decades of established legal jurisprudence and seems to be based on a completely wrong understating of technology”.

“We have full faith that our judicial system will uphold the fundamental rights of the gaming platforms and their users, as it has been doing for over 60 years,” he said. AIGF counts Mobile Premier League (MPL), Gameskraft, and Head Digital Works among its members.

The regulation will likewise possibly set up a question with the Centre over directing the skill-based gaming industry in the nation.

The Union Ministry of Electronics and Information Technology (MeitY) on April 6 informed new gaming-related revisions to the IT Act 2021. It will permit various self-regulatory organisations to decide if a pay-to-play game, where the transfer of monetary amount is involved, is allowed in India or not.

Minister of State for Electronics and information technology Rajeev Chandrasekhar on April 14 said that state can’t regulate the Internet, hence it is “meaningless” for the state to enact online gaming.

Aside from Tamil Nadu, a few state legislatures including Andhra Pradesh, Telangana, Kerala, and Karnataka, have prohibited or attempted to boycott these skill-based games or pay-to-play games, categorized them under the domain of online pay-to-earn as it is a state subject.

A large number of these boycotts were subsequently challenged in state high courts by skill gaming startups and industry associations, and the suspensions were overruled, with the state courts pronouncing it unconstitutional.

On December 21 the Tamil Nadu government moved to the Supreme Court challenging a Madras High Court decision that overruled the past AIADMK-drove government’s November 2020 restriction on online games including the transfer of monetary amount. The case is as yet forthcoming consultation with the Supreme Court.

India’s gaming revenue expanded from $2 billion in FY21 to $2.6 billion in FY22 and is supposed to increase more at a CAGR of 27% to $8.6 billion in FY27, as per Lumikai, a gaming and interactive media venture fund.

Out of $2.6 billion, approx $1.5 billion came from pay-to-play gaming which represents almost 58% of the industry’s revenue.

Credit: Moneycontrol