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Business News›News›India›Tamil Nadu now has a law that queers the pitch for
online gaming industry



THE ECONOMIC TIMES DAILY NEWSPAPER IS AVAILABLE ONLINE NOW.

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TAMIL NADU NOW HAS A LAW THAT QUEERS THE PITCH FOR ONLINE GAMING INDUSTRY

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Tamil Nadu now has a law that queers the pitch for online gaming industry
ET OnlineLast Updated: Apr 10, 2023, 07:49 PM IST
Synopsis


A “LEGAL BATTLE” COULD BE AHEAD BETWEEN THE STATE AND THE CENTRE ON THIS MATTER,
JUSTICE K CHANDRU, A RETIRED MADRAS HIGH COURT JUDGE WHO LED A COMMITTEE TASKED
WITH GIVING RECOMMENDATIONS ON ONLINE GAMING IN THE STATE, HAD TOLD ET RECENTLY.
BASED ON THE COMMITTEE'S REPORT, AN ORDINANCE WAS PASSED BY THE STATE ASSEMBLY
THAT BANNED ONLINE GAMING.

AgenciesThe norms to regulate online gaming notified last week by the Union
government involve a self-regulatory model.
With Governor RN Ravi giving assent to the Bill banning online gambling in Tamil
Nadu, the state now has a law that can pose a challenge to self-regulatory
mechanism as proposed in the norms the Centre notified on Thursday to regulate
online gaming.

A “legal battle” could be ahead between the state and the Centre on this matter,
Justice K Chandru, a retired Madras High Court judge who led a committee tasked
with giving recommendations on online gaming in the state, had told ET recently.
Based on the committee's report, an ordinance was passed by the state assembly
that banned online gaming. The government had set up the committee after dozens
of people who lost money on online games had committed suicide in the state. The
bill got assent from the Governor today after it was re-enacted last month since
an earlier bill passed by the state assembly last year was held by the Governor
and then sent back to the government.

However, the norms to regulate online gaming notified last week by the Union
government involve a self-regulatory model. The government will initially notify
three self-regulatory organisations (SROs) that will approve the games that can
operate in the country as per the rules.



Though Minister of State for Electronics and IT Rajeev Chandrasekhar has said
that online games involved in wagering or betting would fall foul of new online
gaming rules, it will be the SROs who will decide which games need to be banned.
The SROs should include, besides industry representatives, an educationist, an
expert in the field of psychology or mental health, an individual who is or has
been a member or officer of an organisation dealing with the protection of child
rights.

The Central government norms make a distinction between two kinds of real money
games online, games of skill and games of chance. Only those online games
involving real money will be allowed which are based on skill. "We are only
regulating real money games that involve wagering. By process of exclusion, all
other kinds of games will be permissible," MoS Chandrasekhar said.

However, the new Tamil Nadu law bans all kinds of online gambling. “These rules
(the notification of gaming rules by the Centre last week) do not change Tamil
Nadu’s stance on online gaming. We don’t see any other way out except banning.
Tamil Nadu will follow its own legislation,” Justice Chandru told ET recently.



The predicament of the industry
The possible conflict between the norms notified by the Centre and the state
government law worries the industry. Gaming companies, which fear prosecution or
probes by state governments acting in accordance with local regulations despite
the notification of a revised set of central rules, are seeking further
clarification from the Union government, several executives told ET.




They are particularly worried as gambling, betting and wagering on the outcome
of a game are state subjects under the Constitution and can have wide
definitions. States can also ban gaming in their area in accordance with local
laws, they say. Betting and gambling are state subjects, and they are competent
to make laws on these subjects.

Thursday’s notification by the Centre laid out a framework that legitimises
online real-money games while banning only those that allow betting or gambling.
The alignment of state governments with this new set of regulations has emerged
as the key issue, said executives.

Gaming industry representatives and legal experts are of the view that the Union
government should have spelt out the regulations with more clarity.


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