Rethinking the Online Gaming Bill through the Play Games Judgement

I. Introduction

The Promotion and Regulation of Online Gaming Bill, 2025 (“The Online Gaming Bill”) was introduced by the Union to purportedly address “inconsistent approaches by various States on games of chance versus skill and ambiguity in enforcement created by complex monetisation models like in-app purchases, virtual currencies.”[i] It proposes a blanket ban on online real money games. This bill represents an unprecedented move by the Union Government, whose ramifications could hamper the emerging growth of the gaming industry in India.

In a similar, but less aggressive move, the Tamil Nadu legislature enacted the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025. Regulation 4(viii), imposed “blank hours”, a blanket restriction from 12:00 AM to 5:00 AM during which no login to online real money games was allowed. This regulation was challenged in the Tamil Nadu High Court in Play Games 24x7 Private Limited v. State Of Tamil Nadu (“Play Games”), where the constitutionality of Section 5 read with Section 14 of the Tamil Nadu Prohibition of Online Gaming and Regulation of Online Games Act, 2022 (“the Act”), and the accompanying Real Money Games Regulations, 2025 (“the Regulations”), were contested.

This piece examines the implications of the Bill through the lens of the Play Games judgment, highlighting the tensions between state autonomy, central regulation, and constitutional protections that shape the contested terrain of India’s online gaming industry.

II. The Online Gaming Bill: Salient Features, Analysis, and Commercial Impact

The Online Gaming Bill represents a significant shift in India’s approach to the gaming industry. At its heart lies a blanket prohibition on online money games. This prohibition is drafted broadly, extending liability not only to operators but also to advertisers, financial intermediaries, and even platforms that merely facilitate access. In parallel, the Bill expressly brings advertising and fund transfers into the scope of regulation, ensuring that the ecosystem surrounding such games is dismantled in its entirety. Violations are treated as cognisable, non-bailable offences carrying penalties of up to three years’ imprisonment and multi-million-rupee fines.

Commercially, the move threatens to upend an industry valued at USD 3.8 billion, employing more than 130,000 professionals, and attracting significant foreign investment. While the recognition of e-Sports may open new opportunities, it is unlikely to offset the losses in real money gaming, a sector that has driven innovation, employment, and revenue.

The Bill, in short, promises regulatory uniformity, but at the risk of constitutional challenge and commercial contraction.

III. Critiquing the Bill

Since the time of its introduction, the Online Gaming Bill has been criticized for being beyond the legislative competence of the Central Government. The answer to this question cannot be a simple Yes or No, considering that the bill has multiple objectives.

The Union Government is vested with the power to legislate in matters of Posts and Telegraphs; telephones, wireless, broadcasting, and other forms of communication (Entry 31 of Union List, VII Schedule) and Inter-State trade and Commerce (Entry 42 of Union List). Using these powers, the Union Government has already brought about the IT Rules and a regulatory framework for intermediaries, including online gaming platforms.

However, ‘protection of public health’, which is one of the stated intents of the legislation, is mentioned as Entry 6, under the State List. Additionally, betting and Gambling (Entry 34, State List) are also to be specifically regulated by the state.

Therefore, though the Union has the powers to regulate online real money games, the “protection of public health”, which is one of the main intents of the legislation, is beyond its legislative competence.

Even if we presume that the bill is not ultra vires, the key question that remains is whether the Government can impose a blanket ban on all kinds of Online Real Money Games, including Games of Skill?

In R.M.D Chamarbaugwalla v The Union of India, the court had differentiated between ‘Game of Skill’ and ‘Game of Chance’. Games of skill are those games in which success is largely dependent on skill. Other games where success depends merely on chance or luck are called Game of Chance; a euphemistic substitute for Gambling. These games are not trade but res extra commercium and do not have the protection of Article 19(1)(g), unlike Games of Skill.

Through various subsequent judgments, the courts have declared games such as rummy, horse racing, etc., to be games of skill. Recently, in All India Gaming Federation v State of Tamil Nadu & Ors., the State sought to prohibit online games of poker and rummy played for money or other stakes, categorising them as Games of chance. However, the Tamil Nadu High Court held that to impose a ban on such games, the state must first prove that such games, when played online, become games of chance. However, the State had no empirical data to back its claims. On the contrary, research has shown that there is no difference in online and offline versions of rummy and poker from the perspective of requirement of skills. Additionally, it was found that in online versions of rummy and poker, there is preponderance of skills over chance to succeed.

Further, to show that the ban is the most appropriate way of protecting public health at large, the government will have to demonstrate its suitability, necessity and proportionality. In other words, the blanket ban must pass ‘The Fourfold Test of Proportionality.’ In order to pass this test, the Central Government will have to demonstrate that the current regulations, such as the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, are ineffective. However, the inaction of the Central Government in notifying the self-autonomous bodies, which are central to most regulations, has made the provisions ineffective hitherto. This test of proportionality has been relied on in several landmark judgements, including the recent Internet and Mobile Association of India v. RBI.

Therefore, while the critique of the Bill underscores the Union’s limited legislative competence and the questionable validity of a blanket ban, the judicial response in Tamil Nadu reflects how States have stepped in to assert their authority over online real money games. Against this backdrop, the Play Games ruling becomes a crucial reference point.

IV. The Play Games Ruling: What the Madras High Court Said

In this case, there were two major issues in front of the Court: Firstly, whether the Tamil Nadu Government had the legislative competence to enact the Act and the Regulations, and Secondly, whether the Act and the Regulations were ultra vires to Article 19(1)(g) and Article 21.

The Question of Legislative Competence

Answering the first question in the affirmative, the Court held that the State legislature is not barred from enacting laws regulating online real money games as it is covered under the State List under the subject matter of public health and sanitation. The Court recognised the fact that online real money games such as rummy and poker have created public health risks in Tamil Nadu, as shown by the Expert Committee reports. This problem could have been tackled if the provisions related to online gaming under the IT Rules 2021 had been in force. But since the provisions are still dormant, the Tamil Nadu legislature was right in using its legislative competence to fill the vacuum. Because of reports of suicides due to Online RMG, it is the duty of the State under Article 39 to protect public health; therefore, the Tamil Nadu Legislature had the competence to enact the impugned regulation, by virtue of Entry 6 (Public Health) and 26 (Trade and Commerce) of List II.

Fundamental Rights: Balancing Liberty and Public Health

Moving on to the second issue, the Court concurred with the reasons adduced by the State Government and held that the actions of the government cannot be termed baseless or disproportionate. The Court described that gambling may lead to addiction and how ORMGs lack discipline like other sports. The Court notes that the present case poses a scenario of “intra-conflict between the same fundamental rights of different individuals”. They refer to the decision of the Supreme Court in ‘X’ v. Hospital “Z” where the Apex Court held that "where there is a clash of two Fundamental Rights, the right which will have primacy is the public morality or public interest". The Court further held that "when there is a conflict between two individuals qua their right under Article 21, to balance the rights of parties, the Court would apply the test of larger public interest or the test of 'greater community interest".

The Court held that online games or entertainment can be regulated if they adversely affect public health and cause serious social consequences. The State has a duty to act when citizens face physical, mental, or financial risks. Where total prohibition isn't feasible, implementing minimum regulatory safeguards becomes essential. The Court observed that the fundamental right to trade under Article 19(1)(g) is not absolute and must be balanced against the collective rights of the public, especially the right to life under Article 21.

V. What Should Have Been Done?

A complete ban on any business or sector, let alone a sector that is protected by Article 19(1)(g) should be the last resort. The purpose of the act is to regulate e-sports, protect youth and vulnerable populations from social, economic, psychological and privacy-related impacts of online money games, maintenance of public order, etc. These objects could have been better achieved through a cooperative approach by the Centre and States.

Rather than bringing out a special legislation, the Union should have tried to give effect to the Intermediary guidelines. The provision for identification of games by self-regulatory bodies, would have ensured that only certain platforms provide online real money games. Additionally, the Union could have also collaborated with the states and adopted less evasive means like a ban for a few hours, similar to what was provided in the Real Money Games Regulations, 2025. Given the plethora of alternative and effective ways to achieve the same end, the Union’s decision of a complete ban seems unreasonable on several grounds.

VI. Conclusion

The Online Gaming Bill, 2025, although introduced for regulatory clarity and protection of public health; poses risks to constitutional principles, state autonomy, and the economic vitality of an emerging sector. When it comes to bans versus regulations, courts have preferred proportionate, evidence-based regulations before blanket prohibitions. By venturing into the domain of state legislature, and imposing disproportionate restrictions on a fundamental right protected under Article 19(1)(g), the Bill appears to be ultra vires and unduly invasive. A more balanced approach, which included ban as a last resort and focused on preserving the public health, without curtailing a Fundamental Right, would have better suited the needs of the hour.

[i] Clause 4.7, Draft Note for the Cabinet, Proposal for the introduction of The Promotion and Regulation of Online Gaming Bill, 2025, No CLDG/13/2024 CL & DG, Ministry of Electronics and Information Technology.