Driven to kill by online gaming: Father\u2019s throat slit, mother bludgeoned in heady grip of addiction<\/a><\/p>\nGames of skill vs games of chance<\/b><\/p>\n
India\u2019s online gaming industry operates on a legal distinction between games of skill and games of chance. Courts had repeatedly held that games where skill predominates\u2014such as rummy and, in some cases, fantasy sports\u2014could not automatically be treated as betting or gambling.\u00a0<\/p>\n
This distinction became the foundation of the industry\u2019s business model and legal defence, allowing many real-money gaming platforms to argue that they were offering legitimate skill-based competitions rather than gambling activities.<\/p>\n
Regarding the tax regime, earlier, online gaming companies typically paid GST on platform fees or commissions earned from players. In 2023, however, the GST Council amended the law to levy a 28 percent tax on the full face value of player stakes, significantly increasing the industry\u2019s tax burden.\u00a0<\/p>\n
Last week, the Supreme Court upheld both the retrospective application of these amendments and the government\u2019s position that online money gaming involving stakes can be taxed on the full amount wagered.\u00a0<\/p>\n
\u201cFor nearly seven decades, the industry\u2019s entire legal architecture rested on one argument: look at the nature of the game, and not merely the stake element. The court now has clearly said that this argument is irrelevant,\u201d Aahna Mehrotra, Founder, AM Sports Law & Management Co, told ThePrint.\u00a0<\/p>\n
\u201cThe moment money is placed on an uncertain outcome, one is in the territory of betting and gambling. It does not matter whether the underlying game is rummy, fantasy cricket or anything else. The stake is the test, not the skill,\u201d Mehrotra added.<\/p>\n
This judgment, Mehrotra believes, gives state governments a clear roadmap to successfully defend its laws against legal challenges.\u00a0<\/p>\n
According to her, the court suggests that the legislature must use a flexible reading of Entry 34, which grants states the constitutional authority to regulate betting and gambling.\u00a0<\/p>\n
To support this, the state cannot rely on assumptions; it must present empirical evidence showing that these activities cause real social harm, just like Tamil Nadu did by using the Justice Chandru Committee to study the damaging effects of online gaming.\u00a0<\/p>\n
Finally, if that gambling power is not enough on its own, the state can use extra-constitutional backups: Entry 1, which allows laws to maintain public order, and Article 21, which protects a citizen\u2019s fundamental right to life, liberty, and mental health.<\/p>\n
Earlier, governments often had to justify why sweeping restrictions were necessary and proportionate to the harms they sought to address. Following this ruling, she believes courts are likely to be more deferential to legislative assessments of risks such as addiction, financial distress and mental health concerns.\u00a0<\/p>\n
What about the central law?<\/b><\/p>\n
The most immediate implication of last week\u2019s judgement concerns a batch of petitions pending before the Supreme Court challenging the Promotion and Regulation of Online Gaming Act, 2025, or the PROG Act.\u00a0<\/p>\n
The Central government enacted the PROG Act, which came into force on 1 October, and completely prohibited \u201conline money games\u201d, including fantasy sports like Dream11, online betting and gambling activities, online casino games, including poker and blackjack, and online lotteries.<\/p>\n
However, it carves out an exception, allowing e-sports like Dota 2 or Counter-Strike, and online social games, like Candy Crush or Ludo, which are purely for recreational or educational purposes, and don\u2019t involve money. Legally, they fall under skill-based games.<\/p>\n
The rules for the Promotion and Regulation of Online Gaming Rules, 2026, which came into force on 1 May, stated that all forms of \u201conline money games\u201d are completely prohibited within India, regardless of whether they depend on skill, chance, or a mix of both. Operationalising the act, these rules establish a strict, unified federal framework for the digital sector.\u00a0<\/p>\n
The accompanying rules, which came into force on 1 May, make clear that any game falling within the category of an \u201conline money game\u201dis prohibited regardless of whether it is based predominantly on skill, chance or a combination of the two.\u00a0<\/p>\n
In doing so, the framework abandons the traditional legal distinction between games of skill and games of chance that has long formed the basis of the industry\u2019s constitutional defence.<\/p>\n
The Act, which enforces a blanket ban on real-money gaming, has been challenged in the Supreme Court, with petitioners arguing that it violates fundamental trade rights and exceeds parliamentary legislative competence.\u00a0<\/p>\n
The top court has consolidated petitions from various high courts to ensure a uniform ruling, while the government defends the legislation as necessary for protecting users.<\/p>\n
Before the Supreme Court now, petitioners argue that under the Indian Constitution, gambling regulation falls under State lists, making the Central law unconstitutional.\u00a0<\/p>\n
The blanket ban on real-money games is being challenged for violating Article 19(1)(g), which protects the freedom to practice any profession or conduct business.\u00a0\u00a0<\/p>\n
They add that the act discards decades of jurisprudence by failing to differentiate between games of skill (like rummy and poker) and games of pure chance.\u00a0<\/p>\n
The Supreme Court\u2019s s latest ruling does not directly decide those questions. The Union government has consistently defended the PROG Act on grounds of public health, consumer protection, prevention of addiction, money laundering and financial fraud.\u00a0<\/p>\n
Mehrotra cautioned against reading this judgment as a straightforward win for the Union on that pending challenge (PROG Act).\u00a0<\/p>\n
The Union is in a stronger position in certain respects, she said, referring to the court drawing a distinction between genuine skill-based competitions with pre-announced prizes and gambling; effectively providing constitutional support for the parts of the PROG Act that permit e-sports and online social gaming. That framework now sits on firmer ground.\u00a0<\/p>\n
But on the core question of whether Parliament had the competence to impose a nationwide ban on real-money gaming, she thinks the Union\u2019s position has become harder, not easier.\u00a0<\/p>\n
\u201cThe court has emphatically confirmed that betting and gambling is a state subject under Entry 34. The Union\u2019s argument in the PROG Act challenge is that it is regulating online activity, not gambling per se, and that Entry 52 (public interest) provides the basis,\u201d she said\u00a0<\/p>\n
\u201cThat argument now has to contend with a judgment that has gone out of its way to say, in the clearest possible terms, that calling something \u2018online\u2019 does not transform it into a different kind of activity for constitutional purposes. That is not a comfortable position for the Centre,\u201d she added, emphasizing that the legal chapter is far from closed.<\/p>\n
\u201cIn this judgement, the court reiterated that betting and gambling comes within the state matter\u201d, Virag Gupta, cyber law expert and advocate at the SC, explained to ThePrint. He added that fantasy Sports and other games involving stacking upon uncertain outcomes \u2013 constitute betting and gambling. State Governments have the constitutional authority to prohibit online money gaming in their respective jurisdictions.<\/p>\n
At the same time, Gupta explained that PROG Act mentions that the Central Government passed it with legislative competence in the public interest and tech and online platforms come within the Union list. However, the central government or Parliament has no jurisdiction to ban online betting and gambling platforms and the same is reflected in the PROG Act wherein no specific provision to ban such games.<\/p>\n
As per this judgment betting and gambling comes within the state legislative competence, Gupta explained and in most of the states betting is gambling is already banned. \u201cSo, to legalize these money games, the state government will have to make specific laws making these games legal. The central government may not give backdoor entry or licensing to betting and gambling platforms in the guise of e-sports and social games\u201d, he said, adding that \u201caccordingly, other matters, pending before the Chief Justice Bench of the Supreme Court, challenging the Central Law (PROG Act) may become infructuous in view of this judgement\u201d.<\/p>\n
(Edited by Sugita Katyal)<\/p>\n
Also Read:<\/strong> Bookie, bot & the ban: An insider\u2019s view of India\u2019s murky online gaming-betting industry<\/a><\/p>\n\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"Last week, while upholding the constitutional validity of the retrospective 28 percent Goods and Services Tax (GST) levy…\n","protected":false},"author":2,"featured_media":515023,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[276],"tags":[215398,18,16234,135,19,17,167,502,10452,2324],"class_list":["post-515022","post","type-post","status-publish","format-standard","has-post-thumbnail","category-mental-health","tag-central-government","tag-eire","tag-gst","tag-health","tag-ie","tag-ireland","tag-mental-health","tag-mentalhealth","tag-online-gaming","tag-supreme-court"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116681595966726094","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/515022","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=515022"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/515022\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/515023"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=515022"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=515022"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=515022"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}