Betting on games of skill and chance

Betting on games of skill and chance


Online games, of both skill and betting, quickly gained popularity after the pandemic forced people to stay indoors. Many persons working from homes slipped into the habit.

Since 2018, S. Mahesh (name changed as per request) has lost a few lakh rupees playing rummy and cricket online. The 29-year-old Vadapalani resident said, “It started off with ₹5, and over the next few months, the stakes got higher and higher. After a point, despite consistently losing money, my addiction to the game increased.” But in 2020, when COVID-19 hit India, Mahesh lost his job. That was when his family was shocked to find out that he had squandered all the money that they thought he had saved for a crisis like this.

“I was very depressed for a few days — One: it was totally my fault playing the game despite knowing that I had lost several times. Two: I could not even complain as I did this out of my own choice,” he said. Like Mahesh, thousands of others are losing money every minute in Tamil Nadu, betting their hard-earned money on online games.

Gambling and betting is not something new, Tamil Nadu has a long history of such games. For decades, people have been betting offline on bulls, roosters, horse-racing and card games. And during the pandemic, many of these games migrated online. For instance, even rooster fights happen online. Without disclosing the location, a source said that in the last three years, there had been bets being placed on rooster fights, a popular sport in villages and rural parts of the State. “But here you don’t lose much money. The one who placed the cash on the winning rooster gets the money,” he said, adding that people sitting in other countries also watched the fights and placed bets.

Though there are no formal police complaints, many have died because of gambling and gaming. Reports collected by The Hindu across the State show that at least four persons from Coimbatore district ended their lives following losses from online gambling since 2020, according to the police. In October 2020, Mathan Kumar, 28, a resident of Radhakrishnan Street near Seeranaickenpalayam in Coimbatore, ended his life after claiming he had run up heavy debts what with online gambling. Kumar, an employee of a private bank, was addicted to alcohol and online gambling, according to the details provided by the police. This was followed by two more deaths in November. And in August this year, K. Karthik, 36, of Chetty Street in Coimbatore, took his own life after losing money in online gambling.

Barring the case of a police constable near Tiruchi ending his life owing to the mounting debt caused allegedly by online rummy, there have been no other instances of suicide due to distress caused by online games in the central region. Even in the case of the young constable, the reason for the extreme step was mentioned as “heavy debt”, without the debts caused by online rummy being specified, say police sources.

The legal games

On July 24, 2020, the Madurai Bench of the Madras High Court quashed a First Information Report against a school teacher. He and four others were booked after they were found playing cards. Though the petition filed before the court sought the quashing of the FIR, Justice B. Pugalendhi took into account the growing menace of online gaming/gambling. The judge observed that advertisements for these games targeted unemployed youth. They induced them to play the games by saying that they could earn money comfortably from their home. The judge said there was a need to have a comprehensive framework to regulate such online games and curb illegal activities. The judge pointed out that a few other States in the country had amended their Gaming Acts, keeping these aspects in mind. When the menace of the lottery was at its peak, the Tamil Nadu government banned it. Similarly, the government enacted the Tamil Nadu Prohibition of Charging Exorbitant Interest Act to tackle the menace of usury. Therefore, there was a need to regulate and control these games, the judge said.

 

On November 3, 2020, the Madurai Bench took a serious view of online gaming/gambling, with several youngsters killing themselves over debts. Hearing a batch of public interest litigation petitions, a Division Bench of Justices N. Kirubakaran and B. Pugalendhi asked the State government to spell out its stand. The government informed the court that it was considering regulation of such games. The judges pointed out that several States had either banned or regulated online games that involved gambling and hoped the Tamil Nadu government would take appropriate steps. The court also ordered notice to celebrities who endorsed online games in advertisements. On November 24, 2020, the judges were informed that the State promulgated an ordinance to ban online gaming/gambling.

A batch of petitions was filed by many private companies offering online games before the Madras High Court. A Division Bench of Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy allowed the petitions and struck down Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 (Act 1 of 2021) on August 3, 2021. “In the absence of any scientific or empirical study to justify the proposed action, the impugned legislation may be seen to have been born out of a sense of morality and a bid to play to the galleries in election season in a societal ethos where smoking and drinking are regarded as less immoral than when indulged in before elders; and superstitious notions and false senses of vanity continue to prevail as real education is still at a premium despite literacy rates increasing and thousands qualifying each year to add a few letters after their names. That the Bill faced no opposition in the House has more to do with the optics just ahead of the State elections,” the court observed.

In the view of the court having struck down the Tamil Nadu Gaming and Police Laws (Amendment ) Act, 2021, a Division Bench of Justices N. Kirubakaran and B. Pugalendhi hoped that the government would come out with a new legislation to address the issue. Passing orders on a few petitions filed before the Madurai Bench on August 17, 2021, the judges observed that many lives were being snatched away by such gaming/gambling websites and the court hoped the government would come up with an appropriate legislation or a new amendment to address the menace at the earliest, preferably within six months. The court also directed the Centre to look into the issue.

The AIADMK government banned online games but the High Court struck down the Tamil Nadu government’s amendment to the Gaming Act. The DMK government has also said it will pass new laws to regulate online gaming.

The other side

Meanwhile, those in the business of online gaming said the State government should carefully evaluate the pros and cons before coming out with new regulations. N.L. Rajah, senior advocate at the Madras High Court, said, “In all these cases, the court is called upon to apply the ‘skill versus chance test’ and Indian courts have always applied the ‘dominant factor’ test applied by U.S. courts. It is by the application of these principles that the Supreme Court in 1996 held horse-racing for stakes to be a game of skill… For a piece of legislation to pass muster before courts, it has to be very carefully drafted,” he said. He also noted that if there was evidence that several youngsters were being drawn into this, to their detriment, the State should regulate it.

Roland Landers, CEO, All India Gaming Federation (AIGF), said that until any new legislation was brought in, it would be just speculation on what the State intended to do. “We hope the government will come out with a progressive regulatory and policy framework for this sunrise sector. The Indian regulatory framework has clearly differentiated between games of skill and games of chance.” “Just because games of skill entail an entry fee, which is true for several industries including content consumption, they cannot be considered gambling or betting.”

Instead of banning online skill games, the State should devise a regulatory framework or recognise the self-regulation like the one followed by the AIGF member stakeholders. “Regulating this sunrise sector will boost the investment trends in the States, create jobs, and contribute economically,” he said.

Sameer Barde, Chief Executive Officer, The Online Rummy Federation (TORF), said: “TORF would be keen to collaborate with and support the government of Tamil Nadu in developing a comprehensive regulation that will address all the issues of the State, the players, and the operators alike. We sincerely hope that the government will consider establishing a robust regulatory framework for the online gaming sector as the only sustainable and effective way to address concerns.”

According to Mr. Barde, banning online gaming is not the solution. “A case in point, Telangana which had banned Online Rummy in 2017 reported a massive illegal online gambling racket, worth more than ₹1,200 crore, run by a Chinese firm. Similar incidents are possible anywhere, which further underscore the need for a proper regulatory framework.”

TORF also pointed out that the Madras High Court’s judgment highlighted that rummy involved a high preponderance of skill and could not be considered gambling, and these were games of skill and not games of chance. Even the Law Commission’s recommendations stressed regulation and not prohibition. Over the decades several Supreme court judgments have held rummy as a game of skill and protected it under Article 19(1)(g) of the Constitution.

According to a report launched by EY-All India Gaming Federation (AIGF), titled ‘Online gaming in India-The GST conundrum’, the Indian online gaming sector reached $1.027 billion in 2020, a growth of 17.3% from $543 million in 2016, and with its current trajectory, it is expected to reach $2 billion by 2023 in terms of rake fees earned. Since the online skill gaming business horizontal is made of several gaming formats, the Tamil Nadu market is bigger for some formats than the others. On an average, it will be approximately 10%-12% of the total current market size, the report said.

(With inputs from Wilson Thomas in Coimbatore, R. Rajaram in Tiruchi and R Sivaraman in Chennai)

(Assistance for overcoming suicidal thoughts is available on the State’s health helpline 104 and Sneha’s suicide prevention helpline 044-24640050)



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