Despite Tamil Nadu Governor nod to ban online gambling, issue far from resolved

The Centre has muddied the waters with its efforts on regulating online gaming.

Tamil Nadu Chief Minister M.K. Stalin speaking during the Budget session of the Assembly, in Chennai on April 10. | Photo Credit: ANI

On June 6, 2022, 29-year-old Meena (name changed), a mother of two children, died of suicide at Manali New Town in Chennai. An avid player of online rummy, she had bet heavily and ended up losing nearly Rs.10 lakh of her own money, and later the money she raised by mortgaging 20 sovereigns of gold jewellery that belonged to her sisters.

Meena was a mathematics graduate and worked in a healthcare company. She led a normal life with her husband and two children, one three years old and the other just one. Then came the COVID-19 lockdown, and she was forced to work from home at a much lower pay. That was when she took to playing rummy online, lured by the opportunity to make some money.

Initially, things went swimmingly. Meena was winning sizeable sums of money. Thrilled, she decided to gamble with larger and larger sums. As time went by, it became clear that Meena had become addicted to the game. Warnings from her husband, friends, and family fell on deaf ears. Soon enough, luck deserted her and she steadily began to lose money. Yet, unable to stop playing, she began to borrow, from neighbours, friends, and relatives, and continued playing. Finally, at one point, she realised that she had lost everything she had. And that is when she took her life.

Stories of distress

Meena’s is not an isolated case. In 2020, well before awareness about the harms of the game had begun to be talked about, Yoganantham, 33, of Ammankoilkadu near Aattayampatti in Salem district, a post-graduate student turned farmer, died by suicide after having lost money heavily. Yoganantham’s nephew told Frontline that his family was yet to come to terms with the trauma of his death.

According to statistics sourced from the police and government agencies, 41 persons have died by suicide across the State so far, after losing money in online games including rummy and poker. In 2020, besides Yoganantham there were three others, followed by eight in 2021. The suicides brought on by online gambling debts shot up to 23 in 2022, including the death of Meena. In 2023, the figure has already reached six. Most of the victims were between 25 and 35.

The sharp spurt in suicides is a new socioeconomic crisis, and a beleaguered Tamil Nadu government, under enormous pressure from the families of the victims as well as social activists and the media, decided to draft a law banning online games. (A report said that the government received 10,735 emails and letters from the public on the topic, of which 10,708 sought a total ban on all online games.) It was finally cleared by Tamil Nadu Governor R.N. Ravi on April 10, 2023.

A Bill is born

The passing of the Bill banning online gambling, including rummy, comes after a long series of events.

In February 2021, the then AIADMK government brought in certain amendments to the Tamil Nadu Gaming Act, 1930, by enacting the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, which banned online gaming within the Tamil Nadu jurisdiction. The amendment prohibited all forms of games in cyberspace as an offence, “if such games are played for a wager, bet, money or other stakes.”

The amendments, however, were challenged by the online gaming industry. The Madras High Court struck down a part of the amendment in August that year, saying that by “imposing a wide-ranging complete ban the least intrusive test was violated and the ban had thereby fallen foul of Article 19(1)(g) of the Constitution that allows people the right to practise any profession, or to carry on any occupation, trade or business”. However, it suggested that the State could pass a new legislation.

The State argued that the amendments did not violate the tenets of Article 19(1)(g), since activities of a “gambling nature” could not be construed as trade or commerce. It further said that all online games could be manipulated for quick profits and hence, there was no distinction between “games of chance” and “games of skill”.

The government claimed that the people who became addicted to games were mainly young and uneducated and “from middle and poor income families suffering debt and depression”.

The appeal is now before the Supreme Court.

In 2022, the DMK government decided to explore the possibilities of bringing in a new piece of legislation to ban online gambling. It thus promulgated the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022, which subsequently lapsed. The State government then converted the ordinance into a Bill.

Before formulating the Bill, the government constituted a four-member committee in June 2022 under Justice (retd) K. Chandru of the Madras High Court to study the social, economic, legal, and technical implications of the move (interview on page 18). The committee recommended that all online games, including rummy, be banned. After receiving the recommendations, the Assembly met briefly on October 17, 2022, and passed the Bill unanimously and sent it to the Governor for his assent.

From this point, the issue went downhill. Despite repeated reminders, there was only stony silence from the Governor. After 131 days, Governor Ravi returned the Bill to the State legislature for review, saying it was ultra vires the Constitution. The Assembly, which was in session, readopted the Bill and sent it back to him for his approval. (The online gambling Bill was the second one to be readopted by the Assembly, the first being the Bill on NEET.)

The assent came after a strange public statement by the Governor. At the Raj Bhavan, Ravi met representatives of the online gaming industry and held a discussion with them on December 5, 2022. Then, on April 6, 2023, he told a gathering of administrative service aspirants at the Raj Bhavan that “withholding [a Bill] means the Bill is dead”. The Raj Bhavan’s official Twitter handle shared a video clipping of this interaction.

The Constitution makes clear that a Governor must give his nod if a Bill is returned to him for the second time. The chapter on “Assent to Bills” in Article 200 of the Constitution states: “When a Bill is so returned, the House or Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the House or Houses with or without amendment and presented to the Governor for assent, the Governor shall not withhold assent therefrom.”

Dissent and assent

The Governor has been taking a confrontationist attitude to the State government by deferring decisions on Bills and resolutions indefinitely and making controversial statements against it in public forums. Even now, the Governor has 13 Bills and resolutions on his table, some of which are nearly a year old. He must either assent or dissent.

Tamil Nadu Governor R.N. Ravi during a special interaction series, in Chennai on April 13. | Photo Credit: B. VELANKANNI RAJ

On the morning of April 10, Chief Minister M.K. Stalin moved a special resolution in the Assembly against the Governor, an unprecedented second such resolution in four months, the first one being in January to condemn him for selective deviations from the prepared text of his customary address to the Assembly.

This time, the resolution asked the Central government and the President to “immediately issue appropriate instructions to the Governor” to give his assent to the Bills “within a specific period of time”.

Stalin said the Governor had become a mouthpiece of communal forces and wanted him to stop converting Raj Bhavan to a “politicking Bhavan”. The resolution asked the Central government and the President to order the Governor to refrain from “continuing to act against the interests of the people of Tamil Nadu, tarnishing the principles of democracy and the sovereignty of the Legislative Assembly”.

Stalin also demanded that the Constitution be amended and Governors be prescribed a time limit to clear Bills. He said that seeking assent for a Bill passed by an elected government from a “nominated” Governor was against the very spirit of the Constitution, adding that while there was a provision for Parliament to impeach the President, no such provision existed for Legislative Assemblies to remove Governors.

Much to everyone’s surprise, within hours of passing the resolution, the Governor gave his nod to the Bill.

Interestingly, despite delaying his assent to the Bill, Governor Ravi did not give reasons for withholding assent. A government source told Frontline that he returned the Bill as he “believed that the State legislature had no legislative competence” to enact a law on online gaming since cyberspace comes under the ambit of the Centre’s Ministry of Electronics and Information Technology (MeitY).

It is also speculated that he was reluctant to clear the Bill because it criminalised playing online games such as rummy and poker. The Bill had stipulated that playing both would attract an imprisonment of up to three years or a fine or both.

Gaming or gambling?

In R.M.D. Chamarbaugwalla vs Union of India (1957), the Supreme Court ruled that rummy was not a game of chance. It said that any competition where a degree of skill was involved would not fall under the domain of “gambling” even if an element of chance was present in it. In State of Andhra Pradesh vs K. Satyanarayana (1967), it determined that rummy was a game of skill. This was again endorsed in 2015 when a Supreme Court bench struck down a 2012 judgment of a divisional bench of the Madras High Court that ruled that playing rummy with stakes amounted to gambling.

With no specific Act in force, the Centre recently notified the amended Rules to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, to regulate online gaming, even though the Tamil Nadu argument has consistently been that even in online games of skill an element of chance was also involved. It feared, however, that in online rummy and poker, the algorithms could override the elements of skill, thus rendering them as games of chance.

The All India Gaming Federation, the apex body that regulates gaming, said that all online games were run in an ethical and responsible manner. Online gaming portals reiterated that all card games, including rummy and poker, were games of skill and could not be categorised as gambling. What was left unsaid was that when such card games were played offline, players knew with whom they were playing. “But in online gaming you have an invisible opponent,” said a young Chennai-based player, who survived a suicide attempt.

This is the crucial difference between online and offline gambling. Not realising or underestimating the fact that the opponent is an algorithm makes online players take risks that ultimately lead to enormous financial losses.

Gaming companies have mushroomed in India, especially after the pandemic. A November 2021 report by Boston Consulting Group and Sequoia India said that the industry was worth $1.8 billion in 2020 (mobile and non-mobile). Mobile gaming, which accounts for 86 per cent of the industry or $1.5 billion, is expected to grow to $5 billion by 2025. The issue became more complicated when, on April 6, 2023, the MeitY notified the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023, to the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which aims to regulate fake news and online gaming.

The Centre, before effecting the amended Rules, amended the Allocation of Business Rules in a Cabinet meeting held to appropriate the powers of regulating the online gaming industry. These amended Rules stipulated that the online gaming industry would be “regulated” through self-regulatory bodies (SRBs) designated by the Centre, which would determine if games were of skill or based on wagering and betting.

As per Rule 4A, the Central government can designate as many SRBs as it may deem fit to verify an online game involving real money as permissible under the Rules, thus extricating itself from actually deciding whether a game is a game of skill or a game of chance. A cursory perusal of the amendments shows that the Central government apparently wants to legitimise the online gaming industry.

However, given that gambling is a State subject, the issue remains open for further debate and discussion. The April 6 amendments to the Rules, according to legal experts, should be brought through Parliament and not by an executive action.

Reacting to it, Justice Chandru told Frontline that by exercising an executive regulation, the Centre is attempting to legislate in areas covered by the State union and Concurrent lists of the Constitution.

Clearly, the issue will not be laid to rest with the clearing of the Tamil Nadu Bill on online gambling.

Strange interpretation

Governor Ravi appears to have put his own interpretations on portions of the “Assent to Bill” chapter of Article 200 of the Constitution, wherein a specific time frame is not prescribed for Governors to give assent. The phrase “as soon as possible” in the chapter was construed as an “indefinite” period even though several court verdicts have made it clear that Governors cannot be indecisive indefinitely.

A senior lawyer told Frontline: “The Constitution has mandated Governors to take a decision—either to assent or return. Making a statement like ‘withholding means the Bill is dead’ in a public forum amounts to usurping the powers of the Assembly, similar to the exercise of pocket veto, a Constitutional privilege which the President alone enjoys.”

Governor Ravi’s controversial statement that “withholding means the Bill is dead” drew widespread criticism in Tamil Nadu and outside. Various political leaders and activists condemned it, saying that he had “lowered the dignity of the legislature” and identified himself as a “representative of the BJP and the RSS” instead of being above politics.

The Governor’s comment, they said, was a “brazen attack on constitutional federalism”. Stalin also said Ravi should not think of himself as a “great dictator”.

Senior Congress leader and former Union Minister P. Chidambaram said the statement was “a strange and peculiar definition of the Constitution”. He said on Twitter: “Actually when a Governor withholds assent for no valid reason, it means Parliamentary democracy is dead.” He added that Governors were bound to act on the aid and advice of the Chief Ministers and the Council of Ministers.