Legal & Regulatory

Telangana Governor approves Gaming Amendment Bill

Telangana Governor ESL Narasimhan has given his assent to the Telangana Gaming (Amendment) Bill, 2017 on 1st December, following which the Bill was published in the official gazette on 2nd December. The new Gaming Amendment Act now has the force of law, effective 2nd December 2017.

The Gaming Amendment Bill, passed by the legislative assembly on 13th November and the legislative council on 14th November, amends the Telangana Gaming Act, 1974 and incorporates the changes in the Gaming Act brought by two ordinances in June and July 2017.

Among the significant changes brought about by the new Act (and previously the ordinances), to cover online gaming, a new term cyber space has been inserted in one of the clauses meant to define gaming. Further, in the explanation of Section 2(2), it has been clarified that gaming includes any act of risking money on an uncertain event, including on a game of skill.

Further, offences under the new law have been made non-bailable and cognisable. Among other significant changes, a new Section 3A has been inserted wherein in case any offences are conducted by companies, any person incharge of and responsible to the company, including the directors and managing directors have been made liable.

Importantly, Section 15 of the original Act exempting games of mere skill from the ambit of gambling has been deleted and a new provision has been inserted which gives the state government the power to issue orders to remove difficulties in implementation of the Act.

With the Gaming Act now coming into force, online rummy companies will once again have to file amended pleas before the Andhra Pradesh and Telangana High Court to challenge the constitutional validity of the new law. The matter is expected to come up for hearing on or around 18th January, 2018.

Legal & Regulatory Poker

Breaking news: Gujarat HC dismisses poker clubs’ petition, rules poker to be a game of chance [Updated]

Justice Rajesh H. Shukla of the Gujarat High Court dismissed the special civil petition filed by KN Suresh of  Indian Poker Association, Dominance Games Pvt. Ltd., AAA Gaming Pvt. Ltd. and other poker clubs that sought recognition of poker as a game of skill and direction to the police to refrain from interfering in the peaceful conduct of the game of poker in their clubs.

Justice Shukla rejected the petitions filed by the poker clubs in an order pronounced today. The matter pertaining to whether poker is a game of skill and consequently whether it can be played for stakes was argued at length from July to September this year after which Justice Shukla had reserved the matter for final orders and listed it on 23rd November.

The matter was listed on board twice, on 23rd November and on 30th November, but a final order was not pronounced on those two dates. Ultimately, Justice Shukla pronounced the final verdict in court today.

Justice Shukla in his order clearly and categorically ruled that poker does not involve a substantial element of skill and falls within the ambit of gambling under the Gujarat Prevention of Gambling Act, 1887. He further said that the letter of the Ahmedabad police commissioner’s office dated 15th March, 2017 is not illegal, arbitrary or against principles of natural justice as the police have merely interpreted the statutory provision under the Gambling Act.

The petitioner clubs have indicated that they would be filing an appeal against this adverse order of Justice Shukla before a division bench of the Gujarat High Court very soon.

The decision of the Gujarat High Court is seen to be a major setback not just for the poker clubs who approached the High Court but also for the online poker and skill games industry in India, as the adverse order of the Gujarat High Court comes just weeks after the Telangana legislature passed a Bill to ban online gambling and skill games played for stakes.

Note: This story has been updated after receiving the order of the Gujarat High Court. 

Legal & Regulatory

Telangana legislative council passes Gaming Amendment Bill

The Telangana legislative council ratified and passed the Telangana Gaming (Amendment) Bill, 2017 yesterday. The Gaming Amendment Bill was already passed by the lower house of the legislature on 13th November, after all major political parties supported the government’s move to ban online gaming and games of skill like rummy.

Telangana Home Minister Naini Narshimha Reddy while introducing the Bill explained that while the state government has shown zero tolerance towards gambling, many online gaming and gambling websites have been continuing operations. He added that strong measures were required to curb all kinds of online gaming and gambling in clubs.

Congress Member of Legislative Council (MLC) Ponguleti Sudhakar Reddy while participating in the discussion referred to a recent incident where a gambling ring was busted in Marriott Hotel and nearly 80 lakh rupees were seized from one person. He added that the Bill should also try to prevent access to gambling websites using Virtual Private Network (VPN) and other similar means.

TRS MLC Karne Prabhakar stated that the government should try to completely abolish cricket betting. He further said that online cricket betting is widely prevalent  with fortunes changing ball by ball. He also urged the government to try to eradicate matka that is run online by Mumbai-based companies. He added that the government should not to tolerate any one caught gambling.

Senior BJP leader and MLC Naraparaju Ramchander Rao told the government to make the amendments to the Gaming Act foolproof so as to not allow online rummy companies to circumvent the legislative provisions and continue their operations.

Since the Bill has been passed by both houses of the legislature, it is now expected to be approved by the Governor in the next few days.

Legal & Regulatory

Telangana legislative assembly passes Gaming Amendment Bill, gaming included in list of ‘dangerous activities’

The Telangana legislative assembly has passed the Telangana Gaming (Amendment) Bill, 2017 today after a brief discussion.  The Bill, introduced by state Home Minister Naini Narshimha Reddy seeks to convert the two Ordinances that were promulgated by the state government earlier this year into a proper legislation.

Reddy while giving a brief statement explaining the features of the Bill, stated that gambling has had a very bad effect on the standard of life and that the state government has over the past three years raided and shut down many gambling clubs.

He added that using loopholes, gambling companies moved online and have attracted large number of youth with lure of huge rewards, consequently economically and socially devastating families.

The minister further stated that by way of the current amendments all games (including games of skill) that involve money have been included under the ambit of gambling and have been made cognisable and non-bailable offences. He added that several Hyderabad headquartered companies are promoting online rummy and making crores of rupees of profits while ruining women, children, college-goers and teenagers.

Reddy also noted that the ordinance banning online rummy has been applauded by the people, especially by women groups.

Bharatiya Janata Party (BJP) leader and MLA, G Kishan Reddy while participating in the discussion asked the government whether any clubs are currently operating using the 1967 Supreme Court decision that ruled rummy to be a game of skill. He added that the state government needs to coordinate with the central government and completely eradicate online games.

Interestingly, the legislative assembly also passed a Bill amending the Telangana Prevention of Dangerous Activities of Bootleggers, Dacoits, Drug Offenders, Goondas, Immoral Traffic Offenders and Land-Grabbers Act, 1986 on 9th November (the said Bill has been approved by the legislative council on 10th November and since it deals with certain subjects relating to the concurrent list of the constitution, it will be sent to the President of India for his assent).

The amendment to the Prevention of Dangerous Activities Act now brings within its ambit offences committed under the Telangana Gaming Act, 1974.

Under the said Bill, ‘gaming offenders’, i.e. those who have committed or abetted offences under the Telangana Gaming Act are now subject to draconian preventive detention provisions. Any person who is accused of committing a ‘gaming offence’ can now be detained by an order of the Commissioner of Police or District Magistrate for a total period of upto one year, without any trial or bail. Such an order by the state government authorities is however subject to ratification by an Advisory Board comprising of jurists nominated by the state government.

The Gaming Amendment Bill will now be sent to the legislative council for ratification and thereafter it will be sent to the Governor for assent. After the Governor indicates his assent, the Bill will have the force of law.

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.

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.

Legal & Regulatory

SC dismisses rummy petition filed by Krida Sports, asks company to approach High Court first

A full bench of the Supreme Court comprising of Justices Madan Lokur, Abdul Nazeer and Deepak Gupta dismissed a writ petition filed by Chennai-based Krida Sports and Games Private Limited that wanted to run rummy clubs in Andhra Pradesh, Telangana and Tamil Nadu and sought directions from the apex court to the police to refrain from interfering in rummy games.

The bench while disposing off the petition stated that the company was at liberty to approach the relevant state High Courts to seek appropriate relief if they so desired.

Krida Sports had filed a writ petition in the Supreme Court in May 2017 praying that rummy should be allowed to be played for stakes without any interference from the police.

The company, represented by Senior Advocate and eminent jurist Soli Sorabjee, had made the states of Telangana, Andhra Pradesh and Tamil Nadu and the Director General of Police of the three states respondents in its petition.

In July and August 2017, the company had approached the Supreme Court seeking leave to amend its petition to challenge the two ordinances issued by the Telangana government that banned playing rummy and other games of skill for stakes by removing the exemption granted to games of skill and specifically making betting or wagering on games of skill illegal.

On 1st September, the Supreme Court had in its order recorded that the proceedings in the Supreme Court would not impact the ongoing writ petitions filed by online rummy companies in the Andhra Pradesh and Telangana High Court challenging the two Telangana Gaming ordinances.

Meanwhile, the online rummy companies’ petitions in the Andhra Pradesh and Telangana High Court may come up for hearing in the next week. The court had earlier extended the interim relief granted to the rummy websites until 15th October allowing them to offer services to customers residing outside Telangana, even if the company offering the service is registered or located within the state.

Business Gaming

TVF partners with Rummy Circle for Tamil channel

Popular online video platform The Viral Fever (TVF) has announced that it will partner with online rummy website Rummy Circle for the launch of its new Tamil channel TVF Machi.

The new Tamil channel will have dubbed content of its popular Hinglish web series like Permanent Roommates and Pitchers. Rummy Circle will be the official brand partner of the TVF Machi video platform for the two web series, Permanent Roommates and Pitchers.  Rummy Circle will be integrated into various activations that TVF will do across platforms to promote the Tamil Version of the two web series.

The partnership with TVF  Machi comes just a few months after online rummy was banned through an ordinance in Telangana, the biggest rummy playing state in the country.

Commenting on the development, Sachin Uppal, Chief Marketing Officer of Play Games 24×7 Pvt. Ltd., the company that operates Rummy Circle said, “We believe local Indian content in local Indian languages is the right approach to engage and entertain Indian audiences. This partnership with TVF and one of the highest rated Web Series, TVF Pitchers, is a great step forward to spread awareness. The show talks about entrepreneurship and belief in your skills despite all challenges in life which is also the spirit of the Rummy game. A great Rummy player sticks to his skills and fights his way to the top.”

Soon after the ban by the Telangana government, rummy websites have re-calibrated their marketing and branding strategies by focusing on the other big rummy playing states like Andhra Pradesh, Tamil Nadu and Karnataka.

While Rummy Circle seems to be focusing heavily on the Tamil Nadu market, another major website Junglee Rummy is targeting Hindi heartland states like Uttar Pradesh, Bihar, Haryana, Delhi etc. by getting celebrity endorsements from Bollywood actors like Saurabh Shukla and Rajpal Yadav.

Legal & Regulatory

SC to hear challenge to Telangana ordinance, simultaneous hearing to continue in HC

The Supreme Court on Friday said that it will continue to hear the writ petition filed by Krida Sports and Games Pvt. Ltd. on whether it is legal to play rummy for stakes.

Krida Sports had filed a petition in the Supreme Court in May 2017 and amended the its plea in July and August to challenge the constitutional validity of the two Telangana ordinances that banned rummy and all other games of skill played for stakes.

A division bench comprising of Justices Madan Lokur and Deepak Gupta gave two weeks to the parties to complete their pleadings. The bench also stated that the petition will not impact the cases filed by online rummy companies in the Andhra Pradesh and Telangana High Court.

The order passed by the court also notes that there will not be any stay in the proceedings pending in the High Court.  The tentative date for the next hearing as per the Supreme Court website is 18th September.

In the meanwhile, the Andhra Pradesh and Telangana High Court has continued the partial interim relief granted to Ace2Three and other Hyderabad-based rummy websites that enables them to continue offering services to customers located outside the state.

The court has extended the interim relief granted to the rummy websites until 15th October. The matter is slated to be taken up again on 3rd October.

Interestingly however, certain women’s groups have intervened in the rummy matter in the High Court and supported the move by the Telangana government to ban online rummy. The women’s organisations claimed that online rummy had destroyed many families and their husbands had lost their earnings while playing on rummy websites.

The division bench comprising of Acting Chief Justice Ramesh Ranganathan and Justice J. Uma Devi adjourned the matter and stated that the concerns of the women’s organisations would be taken into consideration in subsequent hearings.

Legal & Regulatory

Petition in Supreme Court challenges Telangana gaming ordinances, police interference in rummy games in 3 states

Krida Sports and Games Pvt. Ltd., a Chennai-based company that wants to start rummy operations in Tamil Nadu, Telangana and Andhra Pradesh has filed a civil writ petition in the Supreme Court. The petition states that rummy should be allowed to be played for stakes without any interference from the police.

As per records available on the Supreme Court website, a total of 19 parties have been made respondents by Krida Sports including the states of Telangana, Andhra Pradesh and Tamil Nadu and the Director General of Police of the three states.

The writ petition, filed in May 2017, came up for hearing before a bench of Justices Madan Lokur and Deepak Gupta, twice, on 3rd July and again on 8th August. While the petition was filed before the Telangana government passed two ordinances to amend the Gaming Act which made playing rummy for stakes illegal, the court allowed the company to amend their petition to challenge the constitutional validity of the two ordinances.

The Supreme Court has also issued notice to the respondents and will hear the contentions of the three state governments. Eminent jurist and former Attorney General of India, Soli Sorabjee, appeared for Krida Sports in both the hearings. The matter is likely to come up for hearing again on 1st September.

Saravanan Subramanian, Director of Krida Sports and Games confirmed over phone that his company had indeed filed the petition but refused to give further details of the points raised in the petition and the reasons why his company took the extraordinary measure of filing a petition directly in the Supreme Court, instead of approaching state high courts separately.