Online gaming companies move Madras HC against regulations

Chennai: Online gaming companies on Wednesday approached the Madras High Court to declare certain provisions of the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025 as unconstitutional.

A division bench comprising Justices S M Subramaniam and K Rajasekar before whom the petitions filed by Head Digital Works Private Limited, New Delhi, which is engaged in the business of developing and offering online games of skill in India and two other companies came up for hearing, adjourned it by two weeks to enable the central and state governments to file counter affidavits.

The companies challenged Regulation 4 (iii) (KYC verification shall be mandatory for the initial login with Aadhar to be authenticated by 2nd layer verification of One Time Password (OTP) sent to the phone number linked with Aadhar number) and Regulation 4 (viii) (Blank hours shall be implemented for the real money games from 12 midnight to 5 a.m. (based on Indian Standard Time). No login of the games shall be allowed during these restricted hours).

They also sought a direction to the authorities, requiring them to clarify the Regulation (i), (v) and (vii) as the same do not provide complete clarity in terms of their implementation.

In their petitions, the companies submitted that earlier on two occasions, the Tamil Nadu government prohibited and banned playing of legally permissible games of skill, which was struck down by this court.

However, having failed twice, the state government by way of the RMG (Real Money Games) Regulations was now once again trying to achieve indirectly what it could not do directly. The RMG Regulations specially Regulation 4 (iii) and (viii) were nothing but a colourable exercise of power in hindering the petitioners' right to carry on business as provided under Article 19 (1) (g) of the constitution.

The state government was interfering with the settled position of law determined by the Supreme Court and this court, they added.