Madras HC upholds TN Online Gaming Act; Validates Regulatory Restrictions on Real Money Games

In a significant ruling dated June 3, 2025, the Madras High Court, in Play Games 24x7 Private Limited &  Anr. v. State of Tamil Nadu & Ors. (W.P. Nos. 6784 of  2025), upheld the constitutional validity of the Tamil  Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 (the “TN Online Gaming  Act”) and the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025 (the “TN RMG  Regulations”). The Court affirmed the State’s competence to impose regulatory measures on online real money games, including restrictions on playing hours and mandatory age-verification requirements.

The TN Online Gaming Act was previously challenged  before the Hon’ble Madras High Court in All India Gaming Federation v State of Tamil Nadu, SCC OnLine Mad 6973 (the “AIGF Judgment”), wherein the Court upheld the validity of the Act but struck down the Schedule which classified games such as rummy and poker as games of chance. A Special Leave Petition (SLP)  filed by the State before the Supreme Court remains pending as of now.

Legislative Competence of the State Government to regulate Online Games of  Skill 

The Court reaffirmed the validity of Section 5 of the TN Gaming Act, which empowers the State government to prescribe regulations relating to  time limits, monetary caps, age restrictions, and other safeguards for online gaming. Noting that a Division Bench had previously upheld this provision in the AIGF Judgment, the Court saw no reason to revisit that conclusion.

The petitioners had contended that the regulation of internet-based activities, including online real money games of skill, falls exclusively  within the legislative domain of the Union government. The Court, however, rejected this argument, holding that the impugned legislation and delegated regulations were introduced in furtherance of a legitimate public interest, namely the protection of public health and safety, matters which fall within the State List under the  Constitution. 

The Court further observed that the absence of a Central legislative framework addressing the regulation of online gaming had created a  regulatory vacuum, and that the State Legislature had acted within its constitutional mandate in enacting measures to address this gap. Applying  the doctrine of ‘pith and substance’, the Court pointed out that a State legislation, which substantially fell within subject matters in the State List, cannot be rendered void merely on the basis of incidental overlap with a subject matter in the Union List. 

The Court also dismissed the petitioners’ argument that the impugned provisions of the TN Online Gaming Act violated their fundamental rights under Article 19(1)(g) (Right  to practise any Profession, Occupation, Trade or Business) and Article 21 (Right to Life) of the Constitution, and observed that the right under Article 19(1)(g) is not absolute and is subject to reasonable  restrictions in the interest of the general public. The Court emphasised the need to strike a balance between individual interests and the collective welfare of society, particularly where public health and safety are concerned, and held that the invocation of Article 19(1)(g) cannot be used to deter the people’s right to life under Article 21.

Blank Hours Permissible under Law

The petitioners challenged Regulation 4(iii) of the TN RMG Regulations, which prohibits the offering of real money online games between 12:00 a.m. and 5:00 a.m. on the grounds that such a blanket ban was ultra vires the scope of the TN Online Gaming Act. 

The Court, referring to the observation made in the AIGF Judgement, disagreed, holding that the term “time limit” under Section 5(2)(a) of the TN  Online Gaming Act encompasses complete operational prohibitions during specified hours. It noted the necessity to regulate real money  games, pointing out that in real money games, “a few wins in the start may entice the player to play with more money and naturally becomes addictive which may eventually allow himself to be lost in the game."

The Court also rejected comparisons drawn with other online entertainment services, such as OTT platforms or social media, stating that these do not involve monetary stakes and thus do not present the same risk of compulsive engagement or financial harm.

AADHAR-KYC Verification

The Court upheld the validity of Regulation 4(iii) of the TN RMG Regulations, which mandated the use of AADHAR for know-your-customer (KYC) verification for online gaming platforms, rejecting the petitioners’ arguments that the requirement violated the AADHAR Act by lacking parliamentary authorization and failing to demonstrate a clear State interest. While the petitioners contended that RBI-approved identity documents should suffice and noted AADHAR’s limitations in age verification (since minors can possess them as well), the Court noted that AADHAR’s two-factor authentication infrastructure provided the most  reliable method to prevent underage access to real-money gaming platforms. The Bench emphasized that alternative IDs lack equivalent  verification infrastructure, with the scope of manipulation or deceit being higher in those instances. 

The Madras High Court’s decision significantly bolsters the regulatory framework for online gaming in Tamil Nadu by upholding key provisions aimed at mitigating real money gaming related harms. The judgment affirms the State’s legislative competence to regulate online games of skill in the interest of public health and welfare, including through ‘blank hour’ restrictions and AADHAR based user verification. With the Supreme  Court’s ruling in the pending SLP on the AIGF Judgement yet to be pronounced, this ruling stands as a significant affirmation of the State’s authority to impose regulatory safeguards in the evolving landscape of online real money gaming.

About the authors: Harini Sudersan is a Partner and Satyajit Nair is an Associate at Poovayya & Co.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

If you would like your Deals, Columns, Press Releases to be published on Bar & Bench, please fill in the form available here.