03-06-2025
Night ban, mandatory KYC regulations to stay for online real money games as Madras HC junks pleas by companies, players
The Madras High Court on Tuesday upheld the Tamil Nadu government's regulations for playing online real money games, including imposing a night ban and mandating Aadhaar-based KYC verification.
According to a LiveLaw report, a bench of Justice SM Subramaniam and Justice K Rajasekar dismissed the petitions filed by a group of online gaming companies and players.
The bench said that apart from a paternalistic point, the state government had gone one step further to protect the health and well-being of its citizens, which was a reasonable restriction.
The petitions had challenged the regulations brought in by the Tamil Nadu Gaming Authority, making KYC verification mandatory for playing online real money games. It had also instructed gaming companies to impose a 'blank hour' from 12 am to 5 am restricting the players from participating.
While the pleas had argued on the aspect of Right to Privacy, the court rejected the arguments, saying the Right comes with its own restriction.
'The gaming companies sought to declare Section 5(2) read with Sections 14(1)(c) of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act 2022 along with Regulation 4(iii) and Regulation 4(viii) of the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations 2025 as arbitrary void, illegal and unconstitutional,' the LiveLaw report said.
Under the Section 5(2), the government has the authority to make regulations on time limits, monetary limits, and age restrictions in regard to playing online games. As per Section 14(1)(c) of the Act, no non-local online game provider shall allow the playing of any other online games contrary to the regulations.
The petitioners said that the government was trying to impose a prohibition on online games of rummy under the guise of regulation. While referring to the Information Technology Act, the companies argued that the state government could not make any laws on the subject since all apprehensions were covered under the Act, passed by the Centre, the report added.
The petitions also questioned the KYC verification, saying that the companies could use any of the documents approved by the Reserve Bank of India for verification.
The state government in its defence said that it had a 'parental right' over its people and was duty bound to take care of their health.
It was argued that even as per the earlier orders of the court, the State had a power to bring in regulations for the health of the people. Arguing that the state had a parental right, the state submitted that this right had to be exercised for the larger good of the people. The government said that the restrictions brought in were reasonable restrictions and were protected under Articles 19(2) and 19(6) of the Constitution.
As far as Aadhaar verification is concerned, the government said that it was the only document which provided a two-step OTP verification process, thus mitigating the risk of minors misusing the document, the LiveLaw report added.
