‘No Constitutional Safety For Betting On Games Of Talent’ : Supreme Court Upholds TN, Karnataka Laws Banning Online Games With Stakes

The Supreme Court just lately upheld the constitutional validity of Tamil Nadu and Karnataka legal guidelines that prohibit on-line betting and wagering on video games, holding that State legislatures are competent to legislate on betting even when the underlying sport is considered one of ability.

A bench of Justice JB Pardiwala and Justice R Mahadevan held that States have energy to control and prohibit betting on video games of ability underneath Entry 34 of List II of the Seventh Schedule of the Constitution, which empowers States to legislate on “betting and gambling”. The constitutional safety accessible to video games of ability doesn’t lengthen to wagering or betting carried out on such video games, the Court held.

“While it may be true that games of skill may not get covered by the expression “gambling”, it’s not appropriate to say that even “betting” on video games of ability can be out of the competence of the State Legislature to legislate upon”, the Court held.

The Court additionally held that on-line gaming corporations would not have a basic proper underneath Article 19(1)(g) to hold out commerce involving betting and playing.

“As far as the contention of the online gaming companies that the legislation violates their fundamental rights under Article 19(1)(g) is concerned, it has to be rejected at the outset for the simple reason that once the trade being carried out by the companies is classified as a “betting and gambling” enterprise, it becomes res extra commercium and the question of applicability of Article 19 does not arise“, the Court held.

The Court allowed appeals filed by the States of Tamil Nadu and Karnataka in opposition to judgments of the Madras and Karnataka High Courts that had struck down amendments concentrating on on-line gaming platforms.

The dispute arose out of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Gaming Act, 2022/2023, and the Karnataka Police (Amendment) Act, 2021.

Tamil Nadu and Karnataka had amended their legal guidelines to deal with on-line betting and wagering carried out by computer systems, cellular functions and different digital platforms. The legal guidelines eliminated earlier statutory protections that had exempted wagering on video games of ability and introduced on-line betting actions inside the scope of penal provisions.

Both High Courts had held that video games comparable to rummy and poker have been video games of ability and couldn’t be introduced inside the scope of “betting and gambling” underneath Entry 34 of List II of the Seventh Schedule and had consequently struck down the impugned provisions.

The Supreme Court noticed that each High Courts had adopted an unduly slender interpretation of Entry 34, successfully rendering each the States powerless to ban the exercise of betting and playing. The Court rejected the view taken within the impugned judgments that the expression “betting and gambling” must be interpreted as that means solely “betting on gambling”.

“The finding in the impugned judgments that the expression “betting and gambling” must be interpreted as “betting on gambling” is a transparent Constitutional aberration, tinkering with the Constitution or truly rewriting the Constitutional textual content which Courts are usually not legally entitled to do”, the Court held.

The Supreme Court held that the Constitution doesn’t deprive States of the ability to control or prohibit betting merely as a result of the betting takes place on a sport that predominantly entails ability. The Court clarified that though video games of ability might not themselves quantity to playing, betting on such video games doesn’t mechanically take pleasure in constitutional immunity.

The Court held that after betting and wagering enter the image, the character of the underlying sport turns into irrelevant. It noticed that each betting and playing contain staking cash on an unsure occasion and are related to dependancy and the will for financial acquire. Consequently, States have lengthy been permitted to control or prohibit such actions.

The Court additionally rejected the argument that the impugned enactments have been manifestly arbitrary or disproportionate.

The Court held that betting and playing actions don’t take pleasure in safety underneath Article 19 of the Constitution. While video games of ability themselves are protected by Article 19, betting or wagering on such video games shouldn’t be entitled to constitutional safety except the legislature expressly creates an exception, the Court held. The Court held that within the absence of safety underneath Article 19, a complete prohibition on such actions wouldn’t fail the check of proportionality.

“Games of skill would be protected by the constitutional guarantee laid down under Article 19, but betting or wagering on any game, be it a game of skill, would not be entitled to receive any such protection, unless the Legislature creates an exception in favour of such betting on games of skill”, the Court held.

Apart from Entry 34, the Court held that the States might additionally draw legislative help from Entry 1 of List II regarding public order. The Court noticed that the influence of on-line betting and playing within the digital age extends past particular person members and might have an effect on broader societal pursuits, thereby justifying State intervention.

Tamil Nadu had relied on the Justice Okay. Chandru Committee report, which contained empirical findings relating to harms related to betting linked to on-line gaming. The Court held that the impugned laws was supported by empirical materials.

The Court held that if betting on video games of ability begins posing a critical menace to society and public welfare, States are usually not powerless to control or prohibit such exercise. It highlighted that the States relied on materials regarding on-line gaming dependancy, monetary misery, suicides, and different social harms arising from on-line betting and playing.

The Court concluded that the laws bore a proximate reference to the mischief sought to be addressed and thus, the States had ample legislative foundation to enact the legal guidelines.

The Court subsequently reversed the judgments of the Madras High Court and the Karnataka High Court which had struck down the impugned provisions and restrained State authorities from interfering with on-line gaming companies.

Case no. – Civil Appeal Nos. 6124-6131 of 2023 and related circumstances

Case Title – State of Tamil Nadu & Ors. v. Junglee Games India Pvt. Ltd. & Ors. and related circumstances

Citation : 2026 LiveLaw (SC) 591