Tamil Nadu Governor RN Ravi on Friday gave his assent to the ordinance, passed by the state cabinet last month, banning online gaming with stakes in the state.

With this, the decks have been cleared for the ‘Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022’ to come into effect.

The date on which the law will come into effect would be notified shortly by the government, as per media reports.

Explaining the need for ordinance, the Tamil Nadu government in its Gazzete notification, dated October 1, said that online games and gambling ruin families, lead to suicides, cause gaming addiction affecting public health, disturbing social order and prejudices the maintenance of public order.

The government will set up an online gaming authority to exercise powers conferred on and perform the functions assigned to it under the ordinance.

From regulating online games to issuing certificates of registration to local online games providers, and identifying online games of chance, the authority will oversee the functioning of online games providers in the state.

As part of the regulations, no bank, financial institution or payment gateway provider shall engage in any transaction or authorisation of funds towards payment for any online gambling or any online game of chance.

Industry Dismayed Over Another Ban

Meanwhile, the All India Gaming Federation has urged the Tamil Nadu government to reconsider the ordinance, terming the move “unconstitutional”.

“The Tamil Nadu government has passed an ordinance that will result in banning of most online games of skill including rummy and poker. What this ordinance in effect does is treat and conflicts games of skill as gambling and games of chance. This is disappointing as it disregards the six decades of established legal jurisprudence and also the recent judgement of the Madras HC which struck down a similar law,” the gaming body’s CEO Roland Landers said.

Sameer Barde, CEO of E-Gaming Federation, also expressed dissatisfaction with the ordinance which categorises rummy as a game of chance.

“Rummy being a game of skill has been settled by the Supreme Court and has been held to be a protected trade under Article 19(1)(g) of the Constitution. The State of TN including Rummy as a game of chance is directly in violation of the Supreme Court judgments and also the recent judgement of the High Court of Madras which overturned the law banning online games including rummy,” Barde said.

The federation is examining the ordinance and will take appropriate action in due course of time, he added.

Regulatory Instability Continues To Plague Industry

This is not the first time that theTamil Nadu government has cracked down on online gaming. Last year, the government banned any pay-to-play contests. However, the order was later struck down by the Madras High Court.

Besides, a number of other states such as Telangana, Andhra Pradesh, Karnataka, Kerala have issued several notifications to ban online gaming over the last few years. However, these notifications were struck down by various high courts when challenged legally.

Due to the widespread confusion, the gaming industry has been calling for a pan-India centralised regulation for gaming.

In June, the Centre set up an inter-ministerial committee to oversee the gaming industry in the country.

The online gaming industry is dominated by startups in the country. The sector minted its first unicorn Dream11 in 2019, with two more startups – MPL and Games 24×7 – joining the coveted club in 2021 and 2022, respectively. As per a FICCI-EY report, the online gaming industry generated a revenue of nearly $1.3 Bn in 2021.