Supreme Court Upholds State Laws Banning Online Betting on Games of Skill
Overview
The Supreme Court has confirmed that Tamil Nadu and Karnataka can prohibit online betting even when the underlying game involves skill. The judgment clarifies the constitutional reach of state powers under the Constitution’s Seventh Schedule.
Key Developments
- Bench of Justice JB Pardiwala and Justice R Mahadevan held that states may legislate on betting under Entry 34 of List II.
- The Court rejected the claim that online gaming firms enjoy a fundamental right to trade under Article 19(1)(g) when the activity is classified as betting or gambling.
- Both the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 and the Karnataka Police (Amendment) Act, 2021 were upheld.
- The Court emphasized that once betting is involved, the nature of the underlying game (skill or chance) is irrelevant.
- States may also rely on Entry 1 of List II to justify regulation.
Important Facts
1. High Courts of Madras and Karnataka had struck down amendments, calling games like rummy and poker “games of skill” and exempting them from betting provisions.
2. The Supreme Court described the high courts’ narrow reading of Entry 34 as a “constitutional aberration”.
3. The judgment noted empirical evidence of online gambling harms – addiction, financial distress, suicides – presented by the Justice K. Chandru Committee.
4. The Court held that betting and gambling are “res extra commercium” – outside the realm of protected trade – and therefore not covered by Article 19.
Exam Relevance
Understanding the division of legislative powers between Union and State is essential for the Seventh Schedule. This case illustrates how public order considerations can expand state authority. It also highlights the limits of fundamental rights when the activity is deemed harmful.
Way Forward
States are likely to draft stricter regulations on online betting, citing public‑order and health concerns. Law‑makers must ensure that any restriction passes the proportionality test and is backed by data. For aspirants, keep track of future amendments and judicial pronouncements that shape the balance between individual freedoms and societal protection.