RMG Companies vs Tamil Nadu: 'Prohibition is different from regulation', court remarks
The matter was adjourned by two weeks to enable the central and state governments to file counter affidavits. The court did not give an interim relief to RMG companies.
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On Wednesday, the Madras High Court heard the writ petitions filed by A23, Junglee Games, Games24x7, and the Esports Players Welfare Association, challenging provisions of the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations, 2025. The court did not grant interim relief to these companies.
A bench comprising Justice S.M. Subramaniam and Justice K. Rajasekar issued notices to both the state and union governments, requiring a response within two weeks. The court refrained from issuing any immediate interim orders.
"Prohibition is different from regulation. Just because a game is not prohibited, you cannot argue that it should not be regulated. If something is left unregulated, it would not be appropriate," the court remarked.
Storyboard18 was the first to report that three real money gaming (RMG) operators had taken the Tamil Nadu government to court over the TNOGA Regulations, 2025.
The RMG companies specifically challenged Regulation 4(iii), which mandates KYC verification for the initial login using Aadhaar, authenticated through a second-layer One-Time Password (OTP) sent to the phone number linked to the Aadhaar. They also opposed Regulation 4(viii), which imposes "blank hours" for real money games from midnight to 5 a.m. (Indian Standard Time), during which logins are not permitted.
Additionally, the petitioners sought clarification on Regulations 4(i), 4(v), and 4(vii), arguing that they lack clear guidelines for implementation.
According to the petitions, the companies stated that the Tamil Nadu government had previously attempted to ban legally permissible skill-based games on two occasions, both of which were struck down by the court.
Having failed twice, the state government was now attempting to indirectly achieve what it could not do directly through the new RMG regulations. Specifically, Regulations 4(iii) and 4(viii) were described as a misuse of regulatory power, unfairly restricting the petitioners' right to conduct business under Article 19(1)(g) of the Constitution.
Senior Advocates Mukul Rohatgi and Sajan Poovayya represented the RMG operators, while Senior Advocate Raghavachari V represented the Esports Players Welfare Association and professional esports players. The senior counsels questioned the legality of the regulations since the Centre has already put in place such measures through the Information Technology Act and the Rules framed under the Act.
“Section 5 of Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 which gives power to regulate the game is invalid and inoperative given the Central legislation (IT Act and Rule), Rohatgi submitted."
Advocate General (AG) PS Raman, representing the TN government, told the court the state is well within its rights to bring in the regulations to protect vulnerable persons facing financial and psychological risks. Raman submitted that the time restriction was based on the report received from experts who have found the maximum time of addiction among the youth is from midnight to early morning.
Justice Subramaniam, however, reiterated that simply because a game was not prohibited, it did not mean it could not be regulated.
