Decisions regarding online gambling are fully within the exclusive domain of the states, the Union Government argues before the Delhi High Court. A ruling of the Madras High Court shows that states’ legislative measures may be found excessive, disproportionate and unfair.
Action on Online Betting and Wagering is State Responsibility Says the Centre
The Central Government has submitted an affidavit to the Delhi High Court stating that the legislator has not given authority to the Ministry of Electronics and Information Technology (MEITY) to order intermediaries to block any online gambling sites. MEITY neither has the mandate, nor the legal duty to do so, as a stance on gambling and betting related matters falls under the exclusive competence of state legislative bodies, the Centre’s statement explained.
The Union Government’s affidavit was filed before a Delhi HC bench consisting of Chief Justice Dhirubhai Naranbhai Patel and Justice Jyoti Singh in response to a petition by Avinash Mehrotra. The plea is asking the high judiciary body to direct MEITY, the Ministry of Finance, and the New Delhi government to undertake steps for the banning of sites involved in online gambling, betting and wagering.
Avinash Mehrotra writes to the court that a large number of such websites are accessible in India regardless of the fact that numerous states have adopted legislation that outlaws betting and gambling. “All these activities, though expressly prohibited by law, are being carried out because of a lack of enforcement of the laws in question,” continues the plea.
The petitioner, a financial advisor as per his own words, claims that the online gambling system in India is not regulated and that this results in it having turned into “a great place for carrying out hawala operations, laundering money, etc”.
The petition to the Delhi High Court further alleges that “In fact, it is submitted that Foreign Exchange laws, as well as Income Tax laws, are also likely being violated today by the online gambling websites.”
The Centre’s affidavit answers that no matters relating to the Foreign Exchange Management Act (FEMA), or money laundering and tax evasion legislation fall within the scope of competence of MEITY.
The document, submitted through the Union Government’s standing counsel Anil Soni, also explains that state governments are the appropriate bodies that can issue notices to intermediaries directing them to block online gaming or gambling sites.
The petitioner Mehrotra has not attracted as respondents any of the states which have adopted express legislation concerning online gambling. Therefore, the Central Government argues, it is not possible to arrive at effective adjudication without taking into consideration the views of Sikkim, Nagaland, Telangana, Andhra Pradesh or Tamil Nadu which have not been made parties to the case.
“MEITY cannot be expected to traverse law or legislative mandate and perform the action of blocking online gambling websites. Further, any such action expected to be taken by it of regulating online gambling/gaming websites will result in a conflict of powers vis-a-vis with the ”appropriate government” which is the state government,” says the Centre’s affidavit.
Next hearing on the case has been scheduled by the Delhi High Court bench on October 11.
State Prohibition Regulation Struck Down
Earlier this year, the referred to in the Centre’s affidavit Tamil Nadu law was rejected by the Madras High Court upon reasoning that it contradicted the national Public Gaming Act of 1867.
The cyberspace gambling ban was brought to the Tamil Nadu Assembly on the 4th of February as an Amendment Bill to the Tamil Nadu Gaming Act of 1930, the Chennai City Police Act of 1888, and the Tamil Nadu District Police Act of 1859. The amendment aimed to replace and introduce some modifications to an earlier TN Government Ordinance dated November 20, 2020 that had the same purpose.
Aiming to counter the growth of online gambling caused by the Covid-19 pandemic, the bill provided for punishments of maximum two years of imprisonment or a financial sanction of up to ₹ 10,000, or both, including for games of mere skill such as rummy and poker if a wager or a bet is placed.
Within a month after being passed, the prohibition was challenged by the All India Gaming Federation (AIGF) and several other entities before the High Court at Madras. The petitioners against the amendment law argued that the Supreme Court’s consistent practice after 1968 has shown that rummy is a skill-based game, and not a game of chance, and as such online rummy cannot be prohibited.
Moreover, the pleas continued, the legislation amendments prohibit cyberspace rummy, but allow the game to be played in physical clubs, and this is not fair.
In the beginning of August, the Madras HC bench consisting of Chief Justice Sanjib Banerjee and Justice Senthilkumar Ramamoorthy declared the Tamil Nadu Gaming and Police Laws Amendment Act of 2021 invalid as excessive and disproportionate to its object.