Online Gaming Firms Move Madras High Court against the State's Gaming Rules

Online gaming companies asked the Madras High Court to declare certain provisions of the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025 unconstitutional.

A division bench of Justices S M Subramaniam and K Rajasekar adjourned the hearing of petitions filed by Head Digital Works Private Limited, New Delhi, which is engaged in the business of developing and offering online skill games in India, and two other companies for two weeks to allow 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 real money games from 12 midnight to 5 a.m. (based on Indian Standard Time). During these restricted hours, no game logins will be permitted.

They also requested that the authorities clarify Regulations (i), (v), and (vii), as they do not provide complete clarity in terms of implementation. In their petitions, the companies claimed that on two previous occasions, the Tamil Nadu government prohibited and banned the play of legally permissible skill games, which this court overturned.

However, after failing twice, the state government attempted to achieve the same goal indirectly through the RMG (Real Money Games) Regulations. The RMG Regulations, particularly Regulations 4 (iii) and (viii), were nothing more than a colorable exercise of power that hampered the petitioners' right to conduct business as guaranteed by Article 19 (1) (g) of the Constitution.

They added that the state government was interfering with the settled legal position established by the Supreme Court and this court.