Categories
Legal & Regulatory

Kerala HC says online rummy for stakes legality has to be reviewed on case to case basis

A division bench of the Kerala High Court comprising of Justices AM Shaffique and N Anil Kumar on 11th October delivered their order on a bunch of review petitions filed by online rummy website Ace2Three, RummyCircle and Junglee Rummy, challenging the court’s January 2019 order holding rummy for stakes to be an offence of gambling.

The court in its order on the review petitions at the outset admitted that a 1976 notification under Section 14A of the Kerala Gaming Act, 1960, that exempted rummy from the ambit of gambling, subject to the condition that side-betting is not permitted on such games, was not brought to its attention by the counsels arguing the earlier matter.

The existence of the notification and the court’s lapse in ignoring the said notification was first reported by Glaws in June 2016 and reiterated in February 2019, after which the counsels for the online rummy companies brought it up before the court.

The court in its order also alluded to the Supreme Court’s order in State of Andhra Pradesh v. K. Satyanarayana held that it cannot be said that rummy is a game of chance and there is no skill involved in it.

The court however, also noted the observation of the apex court in the order, that if there is evidence of gambling in some other way or that the owners of the house is making a profit or gain from the game of rummy or any other game played for stakes, the offence may be brought home.

KK Ravindranath, Additional Advocate General of the state of Kerala in his submissions noted that although playing the game of rummy is exempted from the Kerala Gaming Act by the 1976 notification, the issue of online gaming/rummy was not under consideration before the court in the original petition.

He further stated that only playing rummy is exempted under the notification and rummy, if played for stakes would amount to ‘side betting’ and offences under the Kerala Gaming Act would be attracted.

The High Court in its order, did not provide any clear answer to the applicability of the Kerala Gaming Act and 1976 notification on online rummy played for stakes. While disposing of the petitions, it noted that the applicability of the notification to online rummy and meaning of the term side betting has to be decided on a case to case basis depending on the manner in which the games are conducted and stakes involved.

The court in its final observations noted: “There is no dispute about the fact that in view of the notification, playing rummy is excluded from the provisions of the Act and in the impugned judgment the Division Bench has also held that the element of skill is predominant than the element of chance. But the question is whether if rummy is played for stakes, will it amount to violation of the provisions of the Gaming Act or not.

We are of the view that this aspect of the matter has to be decided on a case to case basis. What is the manner in which the games are conducted and how it is being conducted through online methods and what are the stakes involved in the matter are all issues which may arise for consideration. If it is just playing rummy without any side betting, the notification protects the parties involved in it. But, in a case where rummy is played for stakes, the issue might be different which has to be dealt with on a case to case basis. Therefore, the application of notification SRO No.1045/1976 will have to be adjudged depending on a case to case basis.

In the result, we do not find any ground to review the judgment. Review petitions are dismissed.”

The Kerala High Court with its order in the review petition has skirted the issue of whether online rummy for stakes can be legally conducted within the state and has consequently created more confusion rather than providing much needed clarity.

Categories
Legal & Regulatory

HC reserves order in Kerala rummy for stakes matter

A division bench of the Kerala High Court comprising of Justices AM Shaffique and N. Anil Kumar concluded hearing all arguments of the state government and online rummy companies on 24th and 26th September, in a clutch of review petitions filed by online rummy websites, RummyCircle, Ace2Three and Junglee Rummy.

The three leading online rummy websites had, through a review petition, challenged a January 2019 order of a division bench of the High Court which ruled that playing rummy for stakes amounted to the offence of gambling under the Kerala Gaming Act, 1960.

It is understood that the online rummy companies argued primarily on the basis of a 1976 notification issued under Section 14A of the Kerala Gaming Act, 1960 that exempts the game of rummy from the ambit of gambling and allows it to be played, subject to the condition that there is no side-betting.

The existence of the notification was first uncovered by Glaws in 2016. However, the Kerala High Court in its January 2019 order, perhaps in error or due to incorrect submission by the counsels of the parties stated that no such notification under Section 14A of the Gaming Act was issued by the state government.

Apart from Supreme Court and High Court precedents ruling rummy to be a game of skill and allowing it to be played for stakes, the online rummy companies’ stand was primarily based on this seeming error of ignoring the specific notification of the state government that was brought to their notice by Glaws.

After several adjournments, the High Court heard these submissions by the online rummy companies on 24th September and heard the contentions of the state government on 26th September, post which it reserved the order.

A written order on the issue is now expected to be given by the court within the next few weeks.

Categories
Legal & Regulatory

Gujarat, Kerala skill gaming matters marred by adjournments

Crucial matters pertaining to the legality of the skill gaming industry: a review petition on whether rummy for stakes can be permitted pending before the Kerala High Court and the letters patent appeal on whether poker is a game of skill in the Gujarat High Court were adjourned without being heard in the past few weeks.

A fresh division bench of the court comprising of newly appointed Chief Justice Vikram Nath and Justice A.J. Shashtri was supposed to hear the appeal against a 2017 single judge bench order ruling poker to be a game of chance on 16th September.

The clutch of petitions filed by Indian Poker Association Secretary KN Suresh, Dominance Games Private Limited, Aman Chhabra and Hotel Ramada, Ahmedabad, however could not be heard on 16th September and are now scheduled to be heard on 4th October, 2019.

Meanwhile, the review petitions filed by filed by online rummy websites Ace2Three, RummyCircle and Junglee Rummy against a January 2019 order of the division bench of the Kerala High Court saw three successive adjournments without much progress.

The matter, last posted on 4th September before a division bench comprising of Justices AM Shaffique and N. Anil Kumar has now been posted for hearing on 24th September, 2019.

It remains to be seen whether the matters on poker and rummy, critical to the skill gaming industry will gain momentum in the next few weeks or see further adjournments.

Categories
Legal & Regulatory

Online rummy companies file review petition in Kerala HC, matter to be listed on 19th July

At least three online rummy companies, including Play Games 24×7 Private Limited (RummyCircle), Head Digital Works Private Limited (Ace2Three) and Junglee Games India Private Limited (Junglee Rummy) have filed review petitions in the Kerala High Court seeking reconsideration of the January 2019 order of a division bench of the court which held that playing the game of rummy for stakes or wagering on it is not just an innocent pastime but amounts to the offence of gaming under the Kerala Gaming Act, 1960.

The review petitions filed by the online rummy companies came up before a division bench of the Kerala High Court comprising of Justices AM Shaffique and N. Anil Kumar yesterday. The court however, adjourned the petition for two weeks and has now listed the matter for hearing on 19th July, 2019.

As noted by Glaws in its analysis in an exclusive article on 28th February, 2019, the Kerala High Court seems to have made an apparent error in its judgment by overlooking a 1976 state government notification that clearly exempts six games including rummy from the ambit of the Kerala Gaming Act, subject only to the condition that side-betting is not permitted on such games.

The Kerala High Court probably guided by erroneous submissions by the counsels appearing in the case, in fact, stated in its judgment that no such notification exempting certain skill games under Section 14A of the Kerala Gaming Act existed.

According to the available court records, in the earlier hearings of the review petition filed by Play 24×7 Games, the court had asked the Additional Advocate General to get instructions from the state government on the matter.

It remains to be seen whether the Kerala High Court modifies or revises its January 2019 order based on the 1976 notification and other precedents regarding rummy being a game of skill and allowed for stakes being brought to its notice.

Categories
Business Gaming

Ace2Three parent company launches new sports content venture Cricket.com

Head Digital Works Private Limited (formerly Head Infotech Private Limited), the parent company of leading online rummy website Ace2Three, has announced the launch of its latest venture Cricket.com- a sports content platform providing live updates, predictions, data analysis and syndicated content about cricket matches at a private function in Mumbai today.

The star studded opening ceremony was attended by retired and current international cricketers such as Rohit Sharma, Brian Lara, Kevin Pietersen, Mahela Jayawardhene and Smriti Mandhana, where the Cricket.com website and mobile application were officially unveiled.

According to the company, the launch of the new portal is in line with its diversification plans which began after its entry into fantasy sports through an investment in Fanfight and launch of its social gaming platform WittyGames.

The new cricket portal is expected to offer an exciting experience to cricket fans with a greater focus on the use of data in live match scenarios. The editorial and content of the new platform will be led by veteran sports journalist Prem Panicker.

Speaking on the occasion, Deepak Gullapalli, CEO of Head Digital Works noted, “The launch of cricket.com is part of a larger blueprint for the company. India’s biggest religion is cricket and we want to play a bigger role in this space. We already have a sports game platform via Fanfight and we plan to reach out to a larger base of fans via cricket.com. The plan for the organisation includes diversification of the businesses and expansion of our footprint beytnd Indian markets.”

The company also stated in a press release that with the launch of this new initiative, it plans to consolidate its position as a market leader in the gaming space and transition into a gaming and digital entertainment conglomerate.

Categories
Legal & Regulatory

Petitions challenging Telangana Gaming Act gather steam; HC to continue hearing on 18th September

The writ petitions filed by online rummy companies challenging the Telangana Gaming (Amendment) Act, 2017 has gathered steam with the Andhra Pradesh and Telangana High Court hearing the matter on both 11th and 12th September.

The petitions, filed by Head Infotech (India) Pvt. Ltd. (Ace2Three); Play Games 24×7 Pvt. Ltd. (RummyCircle); Junglee Games India Pvt. Ltd. (Junglee Rummy) and Innopark India Pvt. Ltd. (Classic Rummy). The petitions have challenging amendments to the Gaming Act (through two ordinances and later a legislative Bill) that removed the exemption of games of skill from the definition of gambling and inclusion of an explanation in the definition of gaming to include risking of money on any uncertain event, including on games of skill.

Senior counsel CV Mohan Reddy, appearing for the rummy companies cited various apex court judgments that stated rummy was a game of skill and claimed that the shutting down of the online rummy businesses was a violation of the fundamental right to free trade and commerce guaranteed under Article 19(1)(g) of the constitution. He therefore prayed that the Telangana Gaming (Amendment) Act be struck down by the court.

Senior advocate Harin Raval, appearing for the government of Telangana, argued out that online was only one of the modes in which the game of rummy was played and it did not change the nature of the game. He said that rummy, whether played physically in a room or virtually online, is a game of chance and not a game of skill.

The division bench of the High Court comprising of Chief Justice TBN Radhakrishnan and Justice V Ramasubramanian after hearing the matter for a considerable amount of time on Tuesday and Wednesday, adjourned the matter to 18th September, 2018, when further arguments are likely to be heard.

Categories
Business

Ace2Three picks up majority stake in FanFight

Head Infotech Pvt. Ltd., the company that operates leading rummy website Ace2Three, has picked up a majority stake in Gurugram-based fantasy sports website FanFight (operated by WCFN Solutions Pvt. Ltd.), as per a report in Economic Times.

The complete details of the deal have not been made publicly available, however, the Economic Times news report indicates that Head Infotech has invested US$1 million in WCFN Solutions for a majority stake.

“We were exploring building a fantasy platform that is when we got to know about FanFight. We were impressed with the prototype and thought acquiring a majority stake in the startup, where they would be like a subsidiary to Head InfoTech, made more sense versus developing our own platform,” Deepak Gullapalli, founder and CEO of Ace2Three told Economic Times.

The funds invested will be used for marketing, hiring tech and analytical talent, as well as scaling the product, as per the company.

“We are presently focussing on cricket, but after the IPL, we will also focus on football, kabbadi and other sports,” said FanFight co-founder Akhil Suhag.

Glaws had first reported way back in June 2017 that Ace2Three was preparing to invest in real money fantasy sports website FanFight. As per Registrar of Companies (ROC) records available at that time, Gullapalli had in his personal name invested twenty-five lakh rupees in the company and was issued 2,50,000 Series A Preference shares in the Gurugram-based WCFN Solutions.

In April 2017, Head Infotech had announced that a consortium of foreign investors led by Canadian fund Clairvest Group had acquired majority stake in the company for US$ 73.7 million.

Categories
Business

‘The Rummy Federation’ launched to promote and self-regulate online rummy

Leading online rummy operators Ace2Three and Rummycircle have established ‘The Rummy Federation’ (TRF), a registered not-for-profit society that will work towards empowering online rummy industry and encouraging a sustainable and responsible game-play environment.

As per the TRF website, the objectives of the federation inter alia include setting guidelines for online rummy and providing accreditation to online rummy websites, promotion and development of the game of online rummy as well as for making appropriate representations in various fora for policy advocacy.

While Ace2Three and Rummycircle are currently members of TRF, the membership of TRF is open to online rummy operators, technical or service providers working in the online skill game sphere as well as ancillary service providers such as payment gateways, financial institutions, law firms, tax consultants, digital entertainment companies, investors, industry experts etc. working in the rummy space.

Commenting on the launch of the new federation, Trivikraman Thampy, Co-founder and CEO of Rummycircle and member of the Advisory Panel of TRF said, “The Rummy Federation is a first of its kind initiative to establish a transparent and responsible online rummy industry by adopting internationally accepted best practices and tailoring them to the needs of the Indian market.”

Currently there are two categories of memberships of TRF, platinum and gold. TRF has announced that it will be hosting its inaugural launch event on 15th December, 2017 in New Delhi to unveil further details and the plans of the organisation.

Categories
Business Gaming

Ace2Three subsidiary launches social casino games

WittyGames India Pvt. Ltd., a subsidiary of Head Infotech India Pvt. Ltd. (the company that operates leading online rummy website Ace2Three) has started two new social casino games, In-Between and RummyKing.

In-Between is an intuitive 3-card game with a blend of Indian flash. The user needs to make split second decisions on whether to draw the 3rd card or fold or play for special jackpots. RummyKing is a fresh blend of the popular 13 card Indian Rummy. Both games are launched as freemium apps that can be played against other users for a fee.

“We are excited to foray into a new vertical through Witty Games. While RummyKing is an upgrade to the various free play rummy games in the market, In-Between is a game that we conceptualized and customized in-house, which reinforces our belief that there is plenty of room for innovation in this space. Witty Games will continue to innovate and build localized Indian games that will be launched soon,” said Head Infotech CEO Deepak Gullapalli in a press release.

Ace2Three had announced its intention to foray into other forms of gaming at the time of the company’s acquisition by a consortium of foreign investors led by Canadian fund Clairvest Group. The company had also invested in Fanfight, a real money fantasy sports game earlier this year.

Head Infotech and other online rummy companies have seen their revenues getting hit as Telangana banned online rummy and other skill games for stakes through an ordinance in June this year. Telangana is a mjaor rummy market and contributed around 40% of Ace2Three’s total revenue.

Ace2Three and other rummy websites have challenged the Telangana government’s decision to pass an ordinance banning online rummy in the Andhra Pradesh and Telangana High Court. Incidentally, even though the challenge to the Telangana government’s decision is pending and despite the High Court granting partial relief to rummy companies, allowing them to accept deposits from players residing outside Telangana, Head Infotech has shifted its registered office from Hyderabad to New Delhi as per Registrar of Companies (ROC) records.

Categories
Legal & Regulatory

Telangana government to introduce Bill to convert gaming ordinances into Act

The Telangana government is likely to convert the two ordinances banning online gaming (including betting or wagering on games of skill) into an Act and is likely to introduce a Bill to that effect in the legislative assembly next week.

A report in the Times of India indicates that the Telangana cabinet is set to meet on 23rd October to approve three Bills, including one that involves prohibition of online rummy. The Bills are likely to be introduced in the legislative assembly session that is set to begin on 27th October.

It may be recalled that the Telangana cabinet had passed an ordinance banning gaming in a ‘cyber space’ and clarifying that rummy is a game of chance in June this year. In an unprecedented move, the government had issued an amendment ordinance in July to ban betting or wagering on all games of skill, whether played online or offline.

As per Article 213 of the Constitution, the power of the governor to issue an ordinance (based on the advice of the state government) can only be used as a temporary measure in exceptional circumstances and when the state legislature is not in session. The ordinance has to be necessarily converted into an Act passed by the legislature within six weeks of the next sitting of the assembly, failing which the ordinance lapses and becomes non-operational.

Online rummy companies such as Ace2Three, Rummycircle and Junglee Rummy had approached the Andhra Pradesh and Telangana High Court challenging the ordinance as well as amendments to it on the grounds that banning rummy, which has been held to be a game of skill by the Supreme Court impinges on their right to free trade and commerce guaranteed under Article 19(1)(g) of the constitution.

The High Court had granted partial relief to Telangana-based rummy companies like Ace2Three, allowing it to continue accepting players from outside the state of Telangana even though they operated out of Hyderabad.

The matter in the High Court is still pending and slated to come up for hearing on 30th October as per the High Court website.

However, if the Telangana legislature passes the Bill before final determination of the matter, the current petitions filed by the online rummy companies would become infructuous and they would be forced to either amend their petitions or file fresh ones challenging the new Act, thereby delaying progress in the ongoing litigation.

At present it is not clear if the new Bill that will be introduced by the Telangana government will have the same provisions as the Gaming Ordinance or if there would be certain changes in the existing clauses.