In a landmark judgment, the Madras High Court has upheld key provisions of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022. The court upheld two major rules. One is a nighttime ban on online real-money gaming. The other is mandatory Aadhaar-based KYC for users. These steps aim to reduce gambling addiction and improve user verification in the growing digital gaming space.
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Night-Time Ban to Protect Public Health
One of the major highlights of the ruling is the validation of the night-time ban on online real-money gaming between midnight and 6 AM. This regulation is rooted in the government’s concern over the addictive nature of such games, particularly during late hours when individuals, especially younger users, are more vulnerable. The court noted that several incidents of financial ruin and even suicides had been reported due to excessive late-night gaming. By limiting access during these hours, the state aims to mitigate such risks and promote healthier digital behavior.
Mandatory Aadhaar-Based KYC
The court also approved the government’s mandate that all online real-money gaming platforms, including those offering poker and rummy, implement two-step Know Your Customer (KYC) verification using Aadhaar. This regulation aims to prevent underage participation and enhance accountability across gaming platforms. While some critics argued this infringes on individual privacy rights, the court clarified that such measures are permissible when enacted for the greater public interest. By tying user identity to Aadhaar, the system ensures that only verified adults can participate, thus preventing misuse and protecting minors.
State vs. Centre: Who Regulates Online Gaming?
A significant aspect of the verdict was the court’s stance on the state’s authority to regulate online gaming. Gaming companies had argued that only the central government should regulate digital content under the IT Act. However, the court ruled that states have the legislative power to act on matters involving public health, morality, and law and order, which are directly impacted by gambling-related harms. Given that the central government’s proposed online gaming rules under the IT Act are not yet fully operational, the court supported Tamil Nadu’s right to step in and introduce safety measures.
What This Means for the Industry
The ruling has sparked concern among online gaming companies. Many argue that night bans and stricter Know Your Customer (KYC) norms may lead to reduced engagement and increased user drop-offs. However, the court emphasized that user protection takes precedence over commercial interests. Companies will now need to invest in more robust user verification systems and restructure their operational hours in Tamil Nadu.
This decision may also pave the way for similar regulatory frameworks in other Indian states, signaling a shift toward stricter controls over online gaming. For now, platforms like Poker and Rummy will need to adapt quickly to comply with the new law or risk penalties and user restrictions.
FAQs
1. What is the night-time ban on online gaming in Tamil Nadu?
The ban prohibits all online real-money games like poker and rummy between midnight and 6 AM, aiming to reduce addiction and protect users.
2. Is Aadhaar KYC mandatory for online gaming now?
Yes, the Madras High Court has upheld that a two-step Aadhaar-based Know Your Customer (KYC) process is mandatory for all users engaging in real-money gaming in Tamil Nadu.
3. Can the state legally regulate online games?
Yes. The court ruled that Tamil Nadu has the authority to regulate online gaming to protect public health and safety, even though the central government has yet to enforce its own rules.
4. How will this affect gaming companies?
Companies must now implement stricter Know Your Customer (KYC) systems and modify their operations to comply with time restrictions. This may increase compliance costs and reduce user activity during banned hours.
5. Are other states likely to follow Tamil Nadu’s lead?
Possibly. The judgment sets a precedent, and other states may introduce similar laws focusing on addiction control and user verification.
Source Livelaw.in
