'No Constitutional Protection For Betting On Games Of Skill' : Supreme Court Upholds TN, Karnataka Laws Banning Online Games With Stakes

The Supreme Court recently upheld the constitutional validity of Tamil Nadu and Karnataka laws that prohibit online betting and wagering on games, holding that State legislatures are competent to legislate on betting even when the underlying game is one of skill.

A bench of Justice JB Pardiwala and Justice R Mahadevan held that States have power to regulate and prohibit betting on games of skill under Entry 34 of List II of the Seventh Schedule of the Constitution, which empowers States to legislate on “betting and gambling”. The constitutional protection available to games of skill does not extend to wagering or betting conducted on such games, the Court held.

“While it may be true that games of skill may not get covered by the expression “gambling”, it is not correct to say that even “betting” on games of skill would be out of the competence of the State Legislature to legislate upon”, the Court held.

The Court also held that online gaming companies do not have a fundamental right under Article 19(1)(g) to carry out trade involving betting and gambling.

"As far as the contention of the online gaming companies that the legislation violates their fundamental rights under Article 19(1)(g) is concerned, it has to be rejected at the outset for the simple reason that once the trade being carried out by the companies is classified as a “betting and gambling” enterprise, it becomes res extra commercium and the question of applicability of Article 19 does not arise", the Court held.

The Court allowed appeals filed by the States of Tamil Nadu and Karnataka against judgments of the Madras and Karnataka High Courts that had struck down amendments targeting online gaming platforms.

The dispute arose out of the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Gaming Act, 2022/2023, and the Karnataka Police (Amendment) Act, 2021.

Tamil Nadu and Karnataka had amended their laws to address online betting and wagering conducted through computers, mobile applications and other digital platforms. The laws removed earlier statutory protections that had exempted wagering on games of skill and brought online betting activities within the scope of penal provisions.

Both High Courts had held that games such as rummy and poker were games of skill and could not be brought within the scope of “betting and gambling” under Entry 34 of List II of the Seventh Schedule and had consequently struck down the impugned provisions.

The Supreme Court observed that both High Courts had adopted an unduly narrow interpretation of Entry 34, effectively rendering both the States powerless to prohibit the activity of betting and gambling. The Court rejected the view taken in the impugned judgments that the expression “betting and gambling” should be interpreted as meaning only “betting on gambling”.

“The finding in the impugned judgments that the expression “betting and gambling” ought to be interpreted as “betting on gambling” is a clear Constitutional aberration, tinkering with the Constitution or actually rewriting the Constitutional text which Courts are not legally entitled to do”, the Court held.

The Supreme Court held that the Constitution does not deprive States of the power to regulate or prohibit betting merely because the betting takes place on a game that predominantly involves skill. The Court clarified that although games of skill may not themselves amount to gambling, betting on such games does not automatically enjoy constitutional immunity.

The Court held that once betting and wagering enter the picture, the nature of the underlying game becomes irrelevant. It observed that both betting and gambling involve staking money on an uncertain event and are associated with addiction and the desire for monetary gain. Consequently, States have long been permitted to regulate or prohibit such activities.

The Court also rejected the argument that the impugned enactments were manifestly arbitrary or disproportionate.

The Court held that betting and gambling activities do not enjoy protection under Article 19 of the Constitution. While games of skill themselves are protected by Article 19, betting or wagering on such games is not entitled to constitutional protection unless the legislature expressly creates an exception, the Court held. The Court held that in the absence of protection under Article 19, a total prohibition on such activities would not fail the test of proportionality.

“Games of skill would be protected by the constitutional guarantee laid down under Article 19, but betting or wagering on any game, be it a game of skill, would not be entitled to receive any such protection, unless the Legislature creates an exception in favour of such betting on games of skill”, the Court held.

Apart from Entry 34, the Court held that the States could also draw legislative support from Entry 1 of List II relating to public order. The Court observed that the impact of online betting and gambling in the digital age extends beyond individual participants and can affect broader societal interests, thereby justifying State intervention.

Tamil Nadu had relied on the Justice K. Chandru Committee report, which contained empirical findings regarding harms associated with betting linked to online gaming. The Court held that the impugned legislation was supported by empirical material.

The Court held that if betting on games of skill begins posing a serious threat to society and public welfare, States are not powerless to regulate or prohibit such activity. It highlighted that the States relied on material concerning online gaming addiction, financial distress, suicides, and other social harms arising from online betting and gambling.

The Court concluded that the legislation bore a proximate connection with the mischief sought to be addressed and thus, the States had sufficient legislative basis to enact the laws.

The Court therefore reversed the judgments of the Madras High Court and the Karnataka High Court which had struck down the impugned provisions and restrained State authorities from interfering with online gaming businesses.

Headnote

Constitution of India – Seventh Schedule, List II, Entry 34 – Betting and Gambling – Online Gaming – Games of Skill vs. Games of Chance – Scope of legislative competence of States – Interpretation of the conjunction "and" – Article 14 – Manifest Arbitrariness – Article 19(1)(g) – Res Extra Commercium – List II, Entry 1 – Public Order - The Supreme Court set aside the findings of the Madras High Court and Karnataka High Court which held that Entry 34 of List II is restricted to games of chance - The expression "betting and gambling" cannot be split disjunctively or interpreted narrowly as "betting on gambling" to provide immunity to games of skill played for stakes - Entry 34 of List II empowers the State Legislatures to regulate or prohibit betting activities on both games of chance and games of skill when played for stakes. [Relied on State of U.P. v. Lalta Prasad Vaish, 2024 SCC OnLine SC 3029; Welfare Association v. Ranjit P. Gohil, (2003) 9 SCC 358; Paras 217-228, 267 – 273]

Introduction of Stakes Converted Games of Skill into Betting/Gambling – Res Extra Commercium – Supreme Court ruled that while a genuine skill-based competition played without stakes does not amount to gambling, the moment real monetary stakes are introduced, the activity constitutes betting and gambling - A player or third person placing a bet on the uncertain outcome of a game of skill with the hope of winning more than what was staked transforms the business into a betting enterprise. [Relied on M.J. Sivani v. State of Karnataka, AIR 1995 SC 1770; P.N. Krishna Lal v. Govt. of Kerala, 1995 Supp (2) SCC 187; Paras 264-320]

Distinction and Correct Application of Landmark Precedents (RMDC Line & K.R. Lakshmanan) - Supreme Court clarified that the landmark rulings in RMDC-I, RMDC II, and K.R. Lakshmanan were misunderstood by the High Courts - None of these decisions foreclosed the State's power over betting on games of skill – i. RMDC-I & RMDC-II Clarified - In RMDC-I, the definition of "prize competitions" was held to be a gambling adventure as it invited the general public to forecast uncertain future events where common masses lacked statistical expertise – the Supreme Court in RMDC-I approvingly cited Hamilton's Hedaya, which explicitly states that even chess (a game of pure skill) constitutes gambling if anything is staked - RMDC-II explicitly left scope for States to step in if games of substantial skill started to pose problems for the State or cause public harm; ii. K.R. Lakshmanan Clarified - The immunity granted to horse-racing was based on a specific statutory exception carved out by the legislature itself and was limited to highly-regulated betting inside the physical club premises on the day of the race. It cannot shield the "veil of invisibility" and uncontained access inherent in online cyberspace gaming. [Distinguished State of Bombay v. R.M.D. Chamarbaugwala (RMDC-I), AIR 1957 SC 699; R.M.D. Chamarbaugwala v. Union of India (RMDC-II), AIR 1957 SC 628; Dr. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226; Paras 244-245, 251-253, 279, 282-289]

No Manifest Arbitrariness under Article 14 – Empirical Evidence and Policy Decisions - The amended provisions do not suffer from manifest arbitrariness or discrimination under Article 14 - The classification and prohibition of staking money in cyberspace are backed by empirical studies, expert committee reports (such as the Justice K. Chandru Committee), and large-scale public surveys detailing severe socio-economic distress, gaming addiction, financial ruins, and child development harms - The State is fully competent to take such policy decisions for public welfare. [Relied On Polestar Electronic (Pvt.) Ltd. v. Additional Commissioner, Sales Tax, (1978) 1 SCC 636; Paras 292, 305, 306 – 331, 350-365]

Alternative Source of State Legislative Competence – Entry 1 of List II ("Public Order") - Independent of Entry 34, the State Legislatures derive complete competence to regulate and ban online staking platforms under Entry 1 of List II ("Public Order") - Public order is an expression of wide connotation that encompasses public safety, social tranquillity, and the prevention of social and economic disorders - The rampant, digitally-mediated addiction and massive financial accumulation by online platforms trap vulnerable sections and disrupt the "even tempo of the life of the community," creating an immediate threat to the orderly state of society. [Relied on Romesh Thappar v. State of Madras, AIR 1950 SC 124; State of Rajasthan v. Shri G. Chawla, AIR 1959 SC 544; Rev. Stainislaus v. State of Madhya Pradesh, (1977) 1 SCC 677; Arun Ghosh v. State of West Bengal, (1970) 1 SCC 98; Shreya Singhal v. Union of India, (2015) 5 SCC 1; Paras: 332 – 357].

Case no. – Civil Appeal Nos. 6124-6131 of 2023 and connected cases

Case Title – State of Tamil Nadu & Ors. v. Junglee Games India Pvt. Ltd. & Ors. and connected cases

Citation : 2026 LiveLaw (SC) 591