Srinagar, May 27: The Supreme Court on Wednesday upheld laws enacted by Tamil Nadu and Karnataka criminalising online games played for money or stakes, ruling that ‘there is no fundamental right’ to engage in betting or gambling activities.
A bench comprising Justice JB Pardiwala and Justice R Mahadevan set aside earlier judgments of the Madras and Karnataka High Courts that had struck down the respective state laws.
Hearing the matter in State of Tamil Nadu vs Junglee, the apex court observed that betting and gambling fall under the category of “res extra commercium”, meaning activities outside the scope of trade or commerce protected under fundamental rights.
“Since betting and gambling are treated as res extra commercium, no fundamental right can be claimed to carry on such activities,” the court held.
The bench further clarified that once the element of betting or wagering is involved, the distinction between games of skill and games of chance loses significance. The court said states are empowered to regulate or prohibit even skill-based online games such as rummy, poker and fantasy sports if they involve money stakes.
“When the element of betting and gambling enters the picture, the nature of the game ceases to be of relevance,” the court observed.
The Supreme Court also accepted concerns raised by the two states regarding public health and public order, noting issues such as addiction, financial losses and suicides allegedly linked to online money gaming platforms.
The legal dispute arose after Tamil Nadu and Karnataka amended their respective gaming laws to criminalise online games involving wagers or stakes. Tamil Nadu introduced amendments to its gaming legislation in 2021, expanding the definition of gaming and prohibiting wagering in cyberspace, including on games previously recognised as skill-based.
Online gaming firms had challenged the Tamil Nadu law before the Madras High Court, arguing that games like rummy had already been recognised by courts as games of skill and therefore enjoyed protection under Article 19(1)(g) of the Constitution. The High Court struck down the amendment in August 2021.
Karnataka later enacted similar amendments to its police laws in 2021, widening the definition of gaming to include online wagering through tokens, electronic transfers and virtual currency. The Karnataka High Court invalidated the law in February 2022, holding that merely shifting games of skill to an online format did not alter their character.
Both state governments subsequently moved the Supreme Court, which has now upheld the validity of the legislations and affirmed the powers of states to regulate or prohibit online betting and gambling activities involving money stakes. (with inputs from agencies)
