On February 07, 2025, the Tamil Nadu Online Gaming Authority published the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025 (“2025 Regulations”) to address concerns surrounding online real money gaming addiction, financial risks, and the protection of vulnerable groups, particularly minors.
The 2025 Regulations apply to online real-money games, which are defined as games where users make a deposit with the expectation of earning winnings. The 2025 Regulations aim to create a safer gaming environment by imposing strict controls on real-money gaming platforms operating within the State. However, the Regulations have sparked debates over their enforceability, jurisdictional challenges, and potential conflicts with existing laws.
The 2025 Regulations have included several stringent measures as below:
- Prohibition of Minors: Minors under 18 are barred from accessing real-money gaming platforms.
- Blank Hours: Logins to gaming platforms are prohibited between 12 midnight and 5 AM wherein no login shall be permitted.
- Addiction Warnings: Platforms must display a cautionary message, “ONLINE GAMING IS ADDICTIVE IN NATURE,” on their login pages.
- Mandatory KYC and Aadhaar Verification: Platforms must implement KYC verification at account creation, with Aadhaar-based authentication and OTP verification.
- Playtime and Spending Limits: Players must be allowed to set daily, weekly, and monthly spending limits. Pop-up warnings must appear after one hour of continuous play and every 30 minutes thereafter indicating how long they have been playing. The Regulations also mandate platforms to provide an option for the users to set daily, weekly, and monthly monetary limits. As per the Regulations, a pop-up message, indicating the user's limit and the amount spent so far, will also have to be displayed whenever money is deposited into a customer's wallet.
The 2025 Regulations have been framed in exercise of powers conferred under the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 (TN Act), which bans online gambling and games of chance. Section 2(i) of the TN Act defines “online gambling” as online wagering or betting and includes playing of any online game of chance for money or other stakes in any manner. The said definition is further explained as wagering or betting shall be deemed to comprise the collection or soliciting of bets, the receipt or distribution of winnings or prizes, in money or otherwise, in respect of any wager or bet, or any act which is intended to aid or facilitate wagering or betting or such collection, soliciting, receipt or distribution.
The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Amendment Rules, 2023 defines “online real money game” as “an online game where a user makes a deposit in cash or kind with the expectation of earning winnings on that deposit”.
The power to regulate games of skill lies with the State Legislature under Entry 26, List II of the Indian Constitution, viz., “Trade and Commerce”.
However, the constitutional validity of the TN Act besides classification of games like rummy and poker as "games of chance" was recently contested in court, wherein the Madras High Court in the judgment of All India Gaming Federation v State and Others (WP 13203 of 2023) while hearing petition filed by online gaming companies challenging the TN Act had upheld the validity of the TN Act. The Court, however, added that the TN Act would not be applicable to games like rummy and poker, which are games of skill and will be applicable only against games of chance.
The High Court observed that online fantasy games are now held to be games of skill and not games of chance by the High Court of Punjab and Haryana in the case of Varun Gumber vs. Union Territory of Chandigarh & Ors. (2017 Cri LJ 3827) The High Court of Rajasthan, in the case of Chandresh Sankhla vs. State of Rajasthan 2020 SCC OnLine Raj 264 observed that in online game Dream 11, there is no element of betting or gambling as it is a game of skill. The High Court of Bombay has also reiterated the same in the case of Gurdeep Singh Sachar vs. Union of India (2019) 75 GST 258 (Bombay).
The 2025 regulations also align with the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, which mandate due diligence for online gaming intermediaries. However, conflicts arise as the IT Rules allow skill-based games, while 2025 Regulations impose stricter controls.
There are apprehensions that despite the 2025 Regulations, the users can bypass restrictions using VPNs or by accessing platforms from other states, making enforcement difficult. While the 2025 Regulations aim to protect players, restrictions like mandatory KYC and Aadhar verification, blank hours, play time, and spending limits may be challenged by players and/or online gaming companies for being overly intrusive. Significantly, the 2025 Regulations is published at a time when the online gaming sector In India is already grappling with the impact of the flat 28% goods and services tax (GST), imposed in the year 2023, on the total value of bets for online games, irrespective of whether they are games of skill or chance. The issue of GST rate as well as demand/ show cause notices are presently under challenge before the Supreme Court of India.
To conclude, the 2025 Regulations represent a significant step toward responsible gaming and reflect the State's commitment to curbing addiction and financial risks. However, the success shall depend on addressing legal challenges and enforcement hurdles.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
