Madras High Court Upholds Night Ban, Mandatory KYC For Online Real Money Games

The Madras High Court on Tuesday upheld the regulations brought in by the Tamil Nadu government imposing a night ban and mandating Aadhar-based KYC verification for playing online real money games.The bench of Justice SM Subramaniam and Justice K Rajasekar dismissed the petitions filed by a group of online gaming companies and players. The bench said that apart from a paternalistic point, the State had gone one step further to protect the health and well-being of its citizens, which was a reasonable restriction."In the eyes of this Court, the submission put forth by the State is not restricted to just paternalism but goes a step beyond in ensuring the physical, mental and financial well being of its citizens which is its incumbent duty to protect. Though personal autonomy ought to be given utmost importance as given in many other countries across the world, that cannot be a sole deciding factor. Other aspects including the impetus on health and welfare of the citizens also form the spine of our Constitution," the court said.Though the companies had argued on the aspect of Right to privacy, the court has rejected the arguments and said that the Right to privacy comes with it its own restriction. "More often than not, the first right that is pleaded for in cases such as this is right to privacy as upheld by the Hon'ble Supreme Court in Puttaswamy's case. But it must be essentially understood that the Puttaswamy's case did not affirm for right to privacy as an absolute right. The character of the right was transformed into a fundamental right thereby immediately bringing within its fold the reasonable restrictions that is available to all other fundamental rights. So right to privacy carries with it , its own limitations and cannot be claimed in absolute. When put on a scale, a compelling public interest outweighs right to privacy," the court added.The online gaming companies had challenged the regulations brought in by the Tamil Nadu Online Gaming Authority making KYC verification mandatory for playing real money games and also instructing gaming companies to impose a 'blank hour' from 12 am to 5 am restricting the players from playing real money game during this time. The gaming companies sought to declare Section 5(2) read with Sections 14(1)(c) of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act 2022 along with Regulation 4(iii) and Regulation 4(viii) of the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations 2025 as arbitrary void, illegal and unconstitutional.Section 5(2) of the Act gives power to the authority to make regulations providing for time limits, monetary limits, age restrictions or such other restrictions in regard to playing online games and the procedure to regulate its own functions. As per Section 14(1)(c) of the Act, no non-local online game provider shall allow the playing of any other online games contrary to the regulations.The regulations in challenge provided for mandatory KYC regulation for initial logging with AADHAAR to be authenticated by 2nd layer verification of OTP sent to the phone number linked with the Adhaar number. The regulation also stated that blank hours be implemented for the real money games from 12 midnight to 5 am (Indian Standard Time) and no logging of the games be permitted during these restricted hours.The companies argued that the government was trying to impose a prohibition on online games of rummy under the guise of regulation. It was argued that since the government's earlier attempts to ban online games were not fruitful, it was now trying to do something it could not do directly. It was also argued that the State government could not make laws on the subject since the Information Technology Act, passed by the Central Government fairly covered all the apprehensions that the State had.Questioning the mandatory Aadhar verification imposed by the State, the companies argued that the gaming companies could use any of the documents approved by the RBI for the process of verification.The companies also argued that it was the personal choice of the gamers to 'ruin their life' and the State could not act as a 'step father' to tell the players how to live their life. Stating that actions affecting an individual's own health come under private health, he contended that the impugned regulations interfere with an individual's private health, an area over which the State has no authority. He highlighted that the State cannot decide what is good for an individual's health and that restrictions can be placed only when public interest is involved. He pointed out that unless an individual's action is affecting third parties, the State's regulations are unwarranted. Terming the regulations as 'paternalism' on the part of the State, the counsel contended that the State government cannot be a guardian of an individual's private health.On the other hand, the State argued that it had a parental right over its people and was duty ...

Madras High Court Upholds Night Ban, Mandatory KYC For Online Real Money Games

Upasana Sajeev

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