Exclusive: Odisha Gambling Act manifestly arbitrary and unreasonable, WinZO Games before the High Court

A writ petition has been filed before the Odisha High Court challenging the provisions of the Odisha Gambling Act, 1955 (“Act”). Petitioner 1 is Tic Tok Skill Games Private Limited, the operator of vernacular gaming platform WinZO Games. The remaining two petitioners are the directors of WinZO Games. The director Paavan Nanda is one of the petitioners in the gaming ban case before the Karnataka High Court.

In the petition filed through law firm TMT Law, the petitioners highlighted that the provisions of the Act enacted prior to the advent of gaming in digital media do not take into account the distinction between games of skill and games of chance. The plea stated that Entry 34 of List II which is the basis for the enactment of legislation allows the state legislature to enact laws only in case of a game of chance and not in respect of a game of skill. The limitations of Entry 34 of List II to enact blanket gaming ban laws were also argued before the Karnataka High Court in the cases challenging the recent gaming ban law.

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The Act has been challenged on the ground that the term “gambling or gaming” has been drafted in such a way that it can be used interchangeably and hence in the teeth of the law laid down by the Supreme Court in R.M.D. Chamarbaugwala case. The petitioners submitted that the open-ended nature of the term “gambling or gaming” creates an expansive definition which is a blatant attempt to bypass the law laid down by the Supreme Court, apart from being in violation of Article 19(1)(a) and Article 19(1)(g) of the Constitution.

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“That, the primary ground of challenge in the present writ petition is to the fact that the Act prohibits games of skill if a person intentionally exposes money to the risk of loss by chance. This is in flagrant disregard of the law laid down by the Supreme Court that competitions in games of skill are business activities and thus protected under Article 19 (1) (g) of the Constitution of India. The entire gamut of gaming legislations in the country seek to address betting and gambling only, which necessarily are limited to games of chance. Games of skill are specifically outside the domain of such provisions/enactments. However, the State of Odisha has enacted a blanket prohibition on all games for stakes, without any reasonable basis for such blanket prohibition. Therefore, the provisions of the Act being manifestly arbitrary, it is liable to be declared as unconstitutional.”

Emphasis Supplied

Referring to the Constitutional Assembly Debates, the petitioners submitted that there was never any intention to prohibit all games per se, as has been under the Act. In the plea, the petitioners relied on the recent cases:

  • Varun Gumber case before Punjab and Haryana High Court where the Court held that that online fantasy games to be games of skill which required the same level of skill, judgment, and discretion as in case of horse racing. It was held that such games do not have an element of ‘chance’. An SLP filed against the said judgment was dismissed by the Hon’ble Supreme Court.
  • The Junglee Games case where the Madras High Court struck down Part II of the Tamil Nadu Gaining and Police Laws (Amendment) Act, 2021 in its entirety on the grounds that, that firstly, the impugned Part and its blanket ban on gaming for money was excessive, disproportionate, unreasonable, and manifestly arbitrary and violative of Article 19(1)(g) of the Constitution. This judgement is currently challenged by the Tamil Nadu government before the Supreme Court.
  • Further, in Gameskraft case, a notification banning online rummy by Kerala government was challenged. The High Court of Kerala quashed the said government notification for being arbitrary and violative of the right to trade and commerce guaranteed under Article 19(1)(g) of the Constitution of India and the right to equality guaranteed under Article 14 of the Constitution of India.

In the plea, it was submitted that a blanket prohibition of games without any distinction between games of skill and games of chance fall foul of the doctrine of proportionality, and the blanket ban imposed on all gaming in the state does not have any rational connection to prevent the vice of gambling and as such all games of skill also get banned on account of such blanket provisions, thereby directly infringing the fundamental right to practice any trade and occupation guaranteed under the Constitution of India.

Because there are ample alternative measures available to regulate gambling and taking cue from the other states in the country, a prohibition only on games of chance will suffice to achieve the object as stated under the Impugned Act.

The petitioners prayed for striking down the enactment for being unconstitutional and in violation of the law of the land. The petition was listed on November 15 for admission hearing before a bench headed by Chief Justice Muralidhar. The next hearing is on February 14, 2022.

In July 2021, WinZO has raised $65 million in a Series C funding round, led by California-based Griffin Gaming Partners, taking the total tally of capital raised by the company to $90 million. The social gaming platform has recently set up a $20 million fund for the Indian game developer ecosystem.