With the recent enactment of the Promotion and Regulation of Online Gaming Act, 2025 (Online Gaming Act) unsettling the industry, the Supreme Court has consolidated all pending challenges against the Act, setting the stage for a decisive constitutional test. In late August 2025, writ petitions were filed before the High Courts of Karnataka (Head Digital Works v. Union of India), Delhi (Bagheera Carrom v. Union), and Madhya Pradesh (Clubboom11 v. Union), all challenging the validity of the Act. On September 8, 2025, a Bench comprising Justices J.B. Pardiwala and K.V. Viswanathan, acting on the Centre’s request, ordered that all these petitions be transferred to the Supreme Court. The Centre had reasoned that the issues raised in these petitions were virtually identical and that divergent rulings from multiple High Courts could create confusion. The apex court’s decision has significantly heightened the stakes for the petitioners, as a single judgment will now determine the constitutional validity of the Act and the future of India’s entire online gaming industry.
The Act has upended years of investment and regulatory recognition for gaming platforms centred on fantasy sports and other skill based games. The government maintains that the legislation was essential to address the rising social risks associated with online money gaming. While promoting e-sports and social gaming, the Act bans all online money games played for monetary stakes, regardless of whether they are based on skill or chance. Parliament justified this prohibition by highlighting concerns over gambling addiction, financial distress, money laundering and potential links to terror financing, concluding that a comprehensive ban was necessary to protect the public interest. Consequently, India’s booming real money gaming industry, valued at nearly USD 23 billion was brought to an abrupt halt.
Key Legal Issues: Constitutional Arguments
The petitioners challenge raises fundamental questions regarding constitutional rights and legislative authority. Key arguments include:
- Fundamental Right to Trade (Article 19(1)(g))
Indian courts have consistently held that while pure gambling (games of chance) can be banned, games of skill played for stakes are protected under Article 19(1)(g) of the Constitution herein, which guarantees the right to carry on any occupation, trade or business. In R.M.D. Chamarbaugwalla v. Union of India (1957)[1], the Supreme Court ruled that competitions requiring a substantial degree of skill even when money is staked are legitimate business activities that cannot be completely prohibited. Legislatures may regulate skill games in the public interest but cannot impose an absolute ban on them. The petitioners argue that the new Act contravenes this precedent. Section 2(1)(g) of the Online Gaming Act defines any online game played for stakes as a money game, irrespective of whether it is based on skill or chance. In effect, even purely skill based contests, such as fantasy sports or online rummy are outlawed alongside games of chance. Petitioners contend that this obliterates the skill/chance distinction recognized since Chamarbaugwalla, thereby violating Article 19(1)(g).
- Other Fundamental Rights: Articles 14 and 21
The writ petitions also invoke Articles 14 (Equality Before the Law) and 21 (Protection of Life and Personal Liberty). For instance, Head Digital Works contends that the blanket ban is manifestly arbitrary as it equates legitimate domestic skill based gaming platforms with illegal offshore betting operations. This, they argue violates the principle of non-arbitrariness under Article 14. Additionally, the petitioners assert that the prohibition infringes upon the right to livelihood under Article 21, particularly given that the real money gaming industry employs a significant workforce. They further cite precedents where courts have recognized that the freedom to engage in recreational activities like gaming, falls within the ambit of personal liberty protected under Article 21.
- Legislative Competence
The regulation of gambling falls under the subject of the State List of the Constitution, which raises questions about Parliament’s authority to enact a nationwide ban on online gaming. Petitioners contend that Parliament lacks the authority to impose such a ban, as it encroaches upon state jurisdiction. The central government, however, may argue that the Act is valid under its incidental powers, such as its authority over trade between states or cyber related legislation under Article 246. This central versus state conflict presents a significant constitutional issue and the Supreme Court may need to determine whether the Act intrudes upon state powers. This creates a constitutional conflict between central and state powers, and the Supreme Court may have to decide whether the Act oversteps Parliament’s authority.
- Policy vs. Rights
The Centre further justifies the Act on public policy grounds, emphasizing the need to protect society from addiction and financial harm. This rationale will be weighed against the petitioners’ claims of rights infringement. The Government’s narrative, echoed by Prime Minister Modi, describes the ban as a landmark move to shield citizens from the menace of online money games while still encouraging e-sports and other forms of gaming. The Court will have to balance these policy objectives against the fundamental liberty and trade rights of gamers and operators.
The Skill vs. Chance Debate in Indian Law
At the centre of these challenges is India’s long standing skill versus chance doctrine. Courts have repeatedly drawn a legal distinction for activities that are preponderantly skill based have generally been treated as lawful commercial activity, while games of chance fall within gambling prohibitions. Several landmark judgments have cemented this distinction:
In R.M.D. Chamarbaugwalla v. Union of India (1957) the Supreme Court made clear that prize competitions founded on skill are not to be equated with gambling and that legislative restrictions that sweep too broadly can collide with the fundamental right to carry on trade under Article 19(1)(g). The judgment effectively preserved space for skill based contests to operate even when money prizes are involved.
Two later Supreme Court rulings sharpened this test. In K.R. Lakshmanan v. State of Tamil Nadu (1996)[2] the Court held that horse racing which involves knowledge, judgement and strategy is preponderantly a game of skill and therefore not covered by penal gaming provisions that target pure chance. Likewise, in State of Andhra Pradesh v. K. Satyanarayana (1967)[3] the Court found that rummy requires a substantial degree of skill (memory, strategy and mental alertness) and was not a mere game of chance. These authorities have been central to later arguments that online rummy, poker and similar contests are skill games.
The law also draws a formal line between judicial enforceability and criminality in Gherulal Parakh v. Mahadeodas Maiya (1959)[4] the courts explained that wagering contracts are void under the Section 30 of the Indian Contract Act, 1872 but are not treated as criminal acts per se, they are not enforceable by courts, but the wager itself is not converted into a crime. That point has been repeatedly relied on when courts treat the civil consequences of wagers separately from criminal liability.
More recently the fantasy sports disputes brought these principles into the digital age. A line of High Court decisions and subsequent Supreme Court proceedings culminated in the Supreme Court declining to disturb earlier High Court findings that Dream11style fantasy contests involve skill and are not gambling. That jurisprudence which treats fantasy sports as preponderantly skill based has been an important legal anchor for many online skill gaming operators.
At the state level the landmark cases in this instance like All India Gaming Federation v. State of the Karnataka (2021)[5], the court struck down core provisions of The Karnataka Police (Amendment) Act, 2021 that criminalised offering and playing online games for stakes. The bench concluded that a blanket prohibition on games of skill including online skill games was arbitrary and beyond the State’s competence in the terms challenged and therefore ultra vires. This judgment has been widely relied on by industry and other High Courts as a touchstone for protecting skill games from categorical criminalisation.
The state of Tamil Nadu has seen a highly iterative legal process regarding online gaming. Initially, in Junglee Games India Pvt. Ltd. & Ors. v. State of Tamil Nadu & Ors. (2021)[6], the High Court struck down the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, which had imposed a blanket ban on online games including rummy and poker. The Court held that such games are predominantly games of skill and a blanket prohibition violated Article 19(1)(g).
Following this, Tamil Nadu enacted the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022, which sought to classify certain games including rummy and poker as games of chance. This Act was challenged in multiple writ petitions by the All India Gaming Federation and other gaming platforms. In All India Gaming Federation v. State of Tamil Nadu (2023)[7], the Court upheld the validity of the Act in general but struck down the entries in the Schedule that had misclassified rummy and poker as games of chance, reaffirming that these are games of skill. The High Court also validated certain regulatory measures under the Act, including restricted gameplay hours and Aadhaar based KYC requirements, as reasonable exercises of the State’s power to regulate online gaming.
This sequence of jurisprudence demonstrates that, while state legislatures have attempted to regulate online gaming through successive legislative measures, the courts have consistently maintained the skill versus chance distinction. Games that are judicially recognized as predominantly skill based cannot be treated as games of chance merely to impose prohibitions. By contrast, the recent Act removes this distinction entirely, imposing prohibitions or strict regulations on all online money games played for stakes, regardless of whether they are skill or chance based. This is the core of the ongoing constitutional debate, whether the Parliament can lawfully classify skill based games under the same regulatory and penal framework as gambling.
What Lies Ahead: The Constitutional Challenge
With the consolidation of cases, the Supreme Court is now poised to address a nationwide constitutional challenge to the Online Gaming Act. The Court’s substantive hearings will determine the legal fate of online gaming in India. The key issues likely to centre the proceedings include:
- Skill versus Chance:
Petitioners could emphasize the long standing principle established in R.M.D. Chamarbaugwala v. Union of India (1957), that games predominantly based on skill are protected under Article 19(1)(g). Relevant precedents including horse racing, (K.R. Lakshmanan v. State of Tamil Nadu, 1996), rummy (State of Andhra Pradesh v. K. Satyanarayana, 1967) and recent fantasy sports cases. The Union government, in contrast, may argue that modern online gaming blends skill and chance in ways that justify uniform regulation. The critical question before the Court is whether a meaningful skill element survives in these digital platforms or whether Parliament may lawfully classify such games as gambling for constitutional purposes.
- Legality and proportionality of the ban:
The Court will examine whether Parliament is competent to impose a blanket prohibition on online money games. Even if the Act falls within legislative competence, the Court may assess whether the ban is proportionate, balancing trade freedoms under Article 19(1)(g) against the State’s social welfare objectives. Historical jurisprudence shows scepticism toward blanket restrictions on skill based games, which may influence judicial scrutiny.
- Federalism and division of powers:
The challenge may raise questions of federalism. Gambling is traditionally a state subject, and petitioners could contend that the central law exceeds Parliament’s legislative competence. The Court may have to determine whether entries related to “cyber regulation” or “commerce” suffice to justify national legislation, potentially setting new precedent regarding the division of powers between the Union and the States.
- Remedies and Implementation:
The Court may consider interim relief, sequencing of enforcement and related issues such as user refunds. Media reports indicate the government is preparing rules for deposits and refunds, which the Court may need to review or oversee to ensure orderly implementation. In practical terms, the judgment will determine the future of India’s fantasy sports and online skill gaming industry. The sector estimates that over 200,000 jobs could be affected, though the government disputes these figures. Beyond the industry, the verdict will establish broader principles on how far the State can regulate digital entertainment and online platforms.
The Supreme Court’s intervention promises a single, authoritative ruling on the constitutionality of India’s new Online Gaming Act. The hearings will weigh the government’s social welfare arguments against operators’ constitutional rights to conduct skill based gaming. While historical case law has generally favoured the industry on the skill versus chance issue, the introduction of a new statute make the outcome uncertain, marking a potentially landmark moment in defining the balance between individual liberty and social regulation in the digital world.
[1] 1957 AIR 628
[2] AIR 1996 SC 1153
[3] 1968 AIR 825
[4] 1959 AIR 781
[5] WP 18703/2021.
[6] 2021 SCC OnLine Mad 2762.
[7] 2023 SCC OnLine Mad 2762.
