Will a 5-judge bench of the Supreme Court eventually decide the legality of online rummy and poker?

The gaming industry saw a major setback last month when the Telangana government issued an ordinance to ban online gambling. Further, the ordinance clarified that only games totally based on the skill and ability of a person would fall within the category of games of skill and deemed rummy to be a game of chance.

Online rummy operators like Ace2Three, Rummycircle and Junglee Rummy challenged this ordinance in the Andhra Pradesh and Telangana High Court claiming that the ordinance went against the 1967 State of Andhra Pradesh v. K. Satyanarayana division bench judgment of the Supreme Court which held rummy to be a game of skill.

They also claimed that the ban on a game declared to be one involving skill by the government amounted to a violation of their right to trade and commerce guaranteed under Article 19(1)(g) of the constitution.

While these petitions were pending, the Telangana government in an unprecedented move, passed another ordinance on 8^th July to amend the earlier executive fiat. By virtue of the amended ordinance, the exemption granted to games of skill was deleted altogether.

Further, the explanation to the definition of gaming was amended and any act of risking money or otherwise on the unknown result of an event, including on a game of skill has now been brought within the punitive ambit.

Most likely, the petitions filed by the online rummy companies will certainly be amended to challenge the amendment to the ordinance. However, the state government in its pleadings before the High Court has claimed that the last paragraph of the Satyanarayana judgment states that even though rummy is a game of skill, if there is any profit involved or proof of stakes being wagered on the game, an offence of gambling or gaming may be made out.

The Telangana government has thus argued that while games of skill like rummy can be played freely for entertainment and without any stakes or profits, the state is well within its rights to ban rummy or other skill games played with stakes.

It is also likely that the government will place reliance on the 2-judge 1995 Supreme Court judgment of MJ Sivani v. State of Karnataka where the court held that gaming, including mixed games of skill and chance can be restricted or regulated in public interest and doing so does not violate either the right to life and liberty or the right to free trade and commerce.

On the other hand, the petitioner rummy companies have also placed reliance on the 3-judge bench 1996 Supreme Court judgment in KR Lakshmanan v. State of Tamil Nadu, where the apex court ruled that horse-racing is a game of skill and even if betting or wagering is involved in games of skill, the offence of gaming or gambling is not attracted.

The challenge to the Telangana ordinance and hearings in the High Court will have to juxtapose the rulings in these three judgments. Further, the dichotomy between certain observations of the Satyanarayana and Sivani judgments on one hand and the ruling of the 3-judge bench in the Lakshmanan matter will have to be addressed by the court.

While the division bench of the Andhra Pradesh and Telangana High Court is slated to hear the challenge to the two gaming ordinances in the coming few weeks, it is inevitable that one party, i.e. either the state government or the rummy companies will be unhappy with the verdict delivered by the court.

Consequently, it is extremely likely that the issue of game of skill (and especially online rummy) will end up once again at the Supreme Court’s doorstep.

In 2015, the Supreme Court dismissed petitions filed by the same rummy companies on the issue of whether playing online rummy for real money is legal by stating that the issue was not a subject matter in the trial or High Court.

However, the issue in the context of the constitutional validity of the Telangana Gaming Ordinances is once again likely to be heard by the Supreme Court in the coming year or two. If the Supreme Court decides to examine the matter in detail and revisit the question of whether rummy is a game of skill and if so and whether it can be played for stakes or profit in any format, i.e. online or offline, it is plausible that a larger bench would be constituted.

Considering that a there are two division bench and one three judge bench verdict on the issue, it is within the realm of possibility that a five judge constitution bench may in the near future examine and bring finality to the question of whether online rummy and other games of skill are legal.