Online Gaming Regulation: Tamil Nadu Government Invites Stakeholder, General Public Inputs On Legislation

The general public has until August 12 to submit feedback to the Tamil Nadu government.

The GoM heard the legal distinction between online ‘games of skill' and ‘games of chance earlier this month.

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In order to regulate online gaming, the Tamil Nadu government now seeks input from the public on proposed legislation to control games such as online rummy. The development follows reports of at least 20 deaths by suicide that surfaced recently in the state owing to financial debts stemming from such games, including that of a woman who had to deal with gambling debts allegedly caused by online rummy. On June 10, Tamil Nadu constituted a committee led by former Madras High Court judge K Chandru to look into the issue. The panel has already submitted its submission in a report. 

As per the state government, the general public can send their feedback over emails to homesec@tn.gov.in. They have until August 12 to do so.

Any organisation that wishes to make personal representation to the concerned authority was asked to send in their requests by August 9. A stakeholders’ meeting will be held on August 11, where different organisations will be allotted different slots for their presentations. 

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The Centre, in the meantime, is exploring the imposition of Goods and Services Tax (GST) on online gaming, as it is currently clubbed with casinos and horse racing in the country. The Group of Ministers (GoM), led by Meghalaya Chief Minister Conrad Sangma, is set to finalise its report on a possible 28 percent GST on online gaming on August 10. 

Late last month, Union Finance Minister Nirmala Sitharaman categorically termed online gaming "nothing but gambling". "Whether it is horse-racing or online gaming or casinos, the common thread that the Committee highlighted was they are part of betting and gaming,” Sitharaman said. "In other words, they are essentially gambling. There may be an element of skill in it or an element of chance in it. But essentially, all the three are gambling.”  

Earlier this month, the GoM met industry bodies and leading operators to discuss the valuation approach for GST on online gaming and attempted to understand how online skill gaming is different from betting and gambling.

The GoM heard the legal distinction between online ‘games of skill' and ‘games of chance'. Leading industry representatives of the online gaming industry and tax advisory firms shared multiple Supreme Court and High Court rulings, which have affirmed a clear legal distinction between games of chance, which fall under betting and gambling, and games of skill which do not.

As per rulings of multiple Courts, ‘games of skill' are legitimate business activities protected under Article 19(1)(g) of the Indian Constitution since they do not fall under the purview of ‘gambling'. These precedents have repeatedly emphasised that games of chance constitute gambling activity while games of skill do not.