Madras High Court Upholds Nighttime Ban and Mandatory KYC for Online Real Money Gaming
Background
The Madras High Court recently delivered a landmark judgment affirming the constitutional validity of the Tamil Nadu Prohibition of Online Gaming and Regulation of Online Games Act, 2022, and the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025. The impugned regulations introduced a ban on online real money gaming during nighttime hours (midnight to 5 AM) and mandated Aadhaar-based Know Your Customer (KYC) verification for all participants.
Key Issues and Arguments
Petitioners' Contentions:
The petitioners, comprising major online gaming companies and player associations, challenged the legislative competence of the state to regulate online games of skill and contended that the restrictions infringed upon their fundamental rights under Articles 14, 19(1)(g), and 21 of the Constitution.
They argued that the mandatory KYC requirement and the nighttime ban violated the right to privacy as recognized in Justice K.S. Puttaswamy (Retd.) & Anr. v. Union of India & Ors. (2017) 10 SCC 1, and were repugnant to the Information Technology Act, 2000, which governs online activities at the central level.
State's Response:
The State of Tamil Nadu defended the regulations as necessary measures to address the public health crisis arising from online gaming addiction, citing data on suicides and financial distress linked to gambling losses.
The State asserted its legislative competence to regulate public health and public order under the Constitution, emphasizing the compelling need to protect citizens from the adverse effects of unregulated online gaming.
Court’s Analysis and Findings
1. Legislative Competence and Res Judicata:
The Court reiterated its previous stance in Junglee Games India Private Limited v. State of Tamil Nadu (2021), upholding the State's power to regulate online games of skill within its territory.
It held that the present petitions were barred by res judicata to the extent the legislative competence had already been affirmed.
2. Reasonable Restrictions and Public Interest:
The Bench recognized the right to privacy as a fundamental right per Puttaswamy, but clarified that it is not absolute and is subject to reasonable restrictions in the interest of compelling public interest, such as public health and safety.
The Court observed that the right to conduct trade under Article 19(1)(g) cannot override the right to life and health under Article 21, especially when empirical evidence demonstrates significant harm from online gaming.
3. Proportionality of Regulations:
The Court found the nighttime ban and mandatory KYC requirements to be proportionate and justified, noting that the State had placed sufficient material on record regarding the social and health repercussions of online real money gaming.
The measures were deemed necessary to prevent minors’ access, curb addiction, and mitigate financial losses, thus serving a legitimate state interest.
4. Dismissal of Paternalism Argument:
The Court rejected the contention that the regulations were unduly paternalistic, emphasizing the State’s duty to intervene where public health is at risk due to unchecked online gaming.
Glossary of Key Terms
- Online Real Money Gaming (RMG): Digital gaming platforms where participants wager real currency for potential monetary returns.
- KYC (Know Your Customer): A regulatory process requiring verification of a user's identity, often using government-issued identification such as Aadhaar.
- Aadhaar: A unique biometric identification number issued by the Government of India.
- Res Judicata: A legal doctrine preventing the re-litigation of issues that have already been judicially determined.
- Proportionality: A principle requiring that restrictions on fundamental rights must be appropriate and not excessive relative to the public interest sought to be protected.
Conclusion
The Madras High Court’s judgment in Play Games 24x7 Private Limited & Ors. vs. State of Tamil Nadu & Ors. marks a significant development in the regulatory landscape for online gaming in India. The Court has unequivocally upheld the State’s authority to impose reasonable restrictions on online real money gaming, prioritizing public health and safety over commercial interests and individual privacy claims. The decision underscores the judiciary’s recognition of the evolving challenges posed by digital platforms and the need for robust regulatory frameworks to safeguard societal welfare.
Case Title and Citation
Case Title: Play Games 24x7 Private Limited & Ors. vs. State of Tamil Nadu & Ors.
Citation: 2025 LiveLaw (Mad) 185; MANU/TN/2170/2025
Bench: Justice S.M. Subramaniam and Justice K. Rajasekar
Date of Judgment: 03 June 2025.
References to Case Law
- Justice K.S. Puttaswamy (Retd.) & Anr. v. Union of India & Ors., (2017) 10 SCC 1 (Right to Privacy)
- Junglee Games India Private Limited v. State of Tamil Nadu, (2021) (Legislative competence to regulate online gaming)
Author: Abhishek Jat, Advocate
Copyright Notice: © 2025 Abhishek Jat, Advocate. All rights reserved. No part of this article may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the author. Unauthorized use or reproduction of this material is strictly prohibited and may result in legal action.
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