SC upholds Tamil Nadu, Karnataka laws banning online real-money gaming

The Supreme Court on Wednesday (May 27) said that there is no fundamental right to indulge in betting and gambling as it upheld the laws enacted by the Tamil Nadu and Karnataka criminalising online games played for money or stakes. Such games included rummy, poker and fantasy sports.

Sets aside High court rulings

During the hearing, the a bench of Justices JB Pardiwala and R Mahadevan also set aside, Madras and Karnataka High Courts’ orders which earlier struck down the laws.

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"Since betting and gambling are treated as res extra commercium (things outside commerce), no fundamental right can be claimed to carry on such activities," stated the bench as quoted by the Bar and Bench.

It further stated that even if such online games involve skill, states can impose a ban on them in case money is involved.

Skill versus stakes

“When the element of betting and gambling enters the picture, the nature of the game ceases to be of relevance,” the court said adding putting money on stake on an uncertain event raises concerns over addiction and the urge to gain more.

The Supreme Court also rejected submissions that betting on games involving skill would automatically fall outside the legislative competence of States.

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Elaborating further, it stated that while games of skill by themselves may not constitute gambling, states would still retain the power to regulate or prohibit betting activities linked to such games. The Court also accepted concerns raised by States on public health and public order, taking note of issues including addiction, financial losses and suicides associated with online real-money gaming.

"Since betting and gambling are treated as res extra commercium (things outside commerce), no fundamental right can be claimed to carry on such activities," stated the Court.

Origin of the legal dispute

The dispute traces back to amendments introduced by Tamil Nadu and Karnataka to penalise online games played for money or stakes, including rummy, poker and fantasy sports.

Tamil Nadu had first issued an ordinance in 2020 before replacing it with a law that widened the scope of “gaming” and prohibited betting activities in cyberspace, including in games traditionally viewed as skill-based.