TAMIL NADU ORDINANCE NO. 4 OF 2022 - An Ordinance to prohibit Online gambling and to regulate Online games in the State of Tamil Nadu

© GOVERNMENT OF TAMIL NADU 2022

[Regd. No. TN/CCN/467/2012-14.

[R. Dis. No. 197/2009.

[Price: Rs. 5.60 Paise.

No. 472] CHENNAI, MONDAY, OCTOBER 3, 2022 Purattasi 16, Subakiruthu, Thiruvalluvar Aandu–2053

Part IV—Section 2

Tamil Nadu Acts and Ordinances

The following Ordinance which was promulgated by the Governor on

the 1st October 2022 is hereby published for general information:—

TAMIL NADU ORDINANCE NO. 4 OF 2022.

An Ordinance to prohibit Online gambling and to regulate

Online games in the State of Tamil Nadu.

WHEREAS during the recent years online gaming addiction has led

many persons to incur unsustainable debt resulting in suicides;

AND WHEREAS addiction to online games have caused fi nancial

distress and ruined many families;

AND WHEREAS gaming disorder, predominantly online, has been recognized and included by the World Health Organisation (WHO), in its International Classifi cation of Diseases (11th Revision), which is characterised by a pattern of persistent or recurrent gaming behaviour and is, manifested by impaired control over gaming, increasing priority given to gaming over other activities and continuation of gaming despite the occurrence of negative consequences in personal, family, social, educational, occupational or other important areas of functioning;

Tamil Nadu Act 1 of 2021.

AND WHEREAS the Hon'ble High Court of Madras by Common Order dated 03.08.2021 in W.P. No.18022 of 2020, etc, struck down Part II of the Tamil Nadu Gaming and Police Laws (Amendment) Act 2021, which banned wagering or betting in cyber space, as ultra vires the Constitution, with liberty to bring in an appropriate legislation conforming to the constitutional sense of propriety in the fi eld of betting and gambling by the State;

AND WHEREAS the Government constituted a Five Member Committee under the Chairmanship of retired Hon'ble Justice Thiru K. Chandru to advise on enacting a fresh legislation on online games;

IV-2 Ex. (472)

[231]232 TAMIL NADU GOVERNMENT GAZETTE EXTRAORDINARY AND WHEREAS the Committee in its report, taking into account the parameters of physical space of operation, time of playing, players' relationship with other players, addiction level, amount of money involved, level of economic activity, scale of organisers' profi t and role of credit, has observed that online version of any game cannot be compared with the offl ine version of the game, except in cases of word games or board games not involving any random outcome generator;

AND WHEREAS the said report further states that in the case of online version of games including online rummy, the algorithm for the random generators are known to the developers and hence are pseudo random generators; such games can be played with bots (an autonomous program or character designed to interact with systems or users); no mechanism is available for auditing the centralised server architecture of the gaming systems; and artifi cial intelligence can be used to manipulate the games and lure the players into continued indulgence;

AND WHEREAS the said report classifi es the online games, into two types, namely, one which have minimal or negligible randomness factor and another having random event or count generators which are pseudo random and are addictively designed and accordingly recommends to regulate the former and to ban the latter;

AND WHEREAS in a recent survey conducted by the Government among more than two lakh teachers of the School Education department, to study the effects of online games on school students, more than seventy four per cent. of the teachers responded that concentration of students is impacted, sixty seven per cent. of the respondents said that they noticed eye defects, more than seventy four per cent. of them said they noticed decrease in intelligent quotient, writing skills and creativity of students, more than seventy six per cent. said they have noticed signifi cant decrease in self esteem of students, more than seventy seven per cent. said they have noticed increase of anger in students and more than seventy two per cent. said they have noticed indiscipline among students;

AND WHEREAS the Government, on seeking the view of the general public on the proposed legislation, more than ninety nine per cent. that is, 10,708 out of the total 10,735 mails received, have requested for imposing a total ban on online games;

AND WHEREAS seventeen stakeholders comprising of representatives from the online gaming industry, think tanks, political parties, players association and social activists, who were provided an opportunity to express their views in person, have put forth various suggestions and requests to the Government, such as, to allow self regulation by the industry themselves, regulation by the Government, to differentiate real money games and other forms of games, to provide age and money restrictions, to ban advertisements, to prevent money laundering, to provide grievance redressal mechanism and to provide a total ban on online games;

AND WHEREAS it is considered that the issues of online gaming and gambling cannot be dealt with by the old binary of game of chance versus game of skill and a new conceptual framework is needed which incorporates understanding of how information technology operates at basic level, the critical difference between physical and online in general and also between physical and online versions of games;

AND WHEREAS it is an established scientifi c fact that true random outcome is not feasible in a software and any randomness will depend upon the specifi c algorithm written by the developer and that audit of the algorithm makes it diffi cult to detect any hidden algorithm designed to favour the game provider and that overlay of artifi cial intelligence in the online gaming can make the gaming scenario completely unfair to the game player/customer, with the game service provider / facilitator literally being able to hold all the cards; and that no scientifi cally validated algorithm for testing of even pseudo randomness is available at present;

AND WHEREAS due to the inherent addictiveness by design of the online games and the money being put in by the game players, the complete gaming scenario amounts to an exploitative, addictive service, causing not only health hazards but also social and economic harm of epidemic proportions;

AND WHEREAS many research studies on the effects of online gambling and online gaming addiction on youth, have highlighted negative effects such as development of aggressive behaviour, poor eye sight, reduced concentration, diminished analytical thinking, decreased productivity and hence should be viewed as a potent vice that would affect the long term prospects of the State and its population;

AND WHEREAS the ruining of families and suicide deaths due to online gaming addiction affects public health, disturbs social order and prejudices the maintenance of public order;

AND WHEREAS the Government, after careful consideration of the report of the said Committee, the fi ndings of the survey among school teachers, research studies on the subject, and the views of the stakeholders and the general public, have decided to enact a law to prohibit online gambling and to regulate online games in the State;

AND WHEREAS the Legislative Assembly of the State is not in session and the Governor of Tamil Nadu is satisfi ed that circumstances exist which render it necessary for him to take immediate action for the purposes hereinafter appearing;

NOW, THEREFORE, in exercise of the powers conferred by clause (1) of Article 213 of the Constitution, the Governor hereby promulgates the following Ordinance:-

CHAPTER-I.

PRELIMINARY.

Short title and 1. (1) This Ordinance may be called the Tamil Nadu Prohibition of

commencement.

Online Gambling and Regulation of Online Games Ordinance, 2022.

(2) It shall come into force on such date as the Government may,

by notifi cation, appoint.

2. In this Ordinance, unless the context otherwise requires,- Defi nitions.

(a) "Appellate Authority" means the Appellate Authority established

by the Government under section 13;

(b) "appointed day" means the date appointed under sub-section (2)

of section 1;

(c) "Authority" means the Tamil Nadu Online Gaming Authority

established under section 3;

(d) "geo-blocking" means restricting users from accessing online content, online applications or online services, based on the user's geographical location;

(e) "Government" means the State Government;

(f) "local online games provider" means an online games provider,—

(i) whose central management and control of the service is in

this State; or

(ii) whose service that is available for access by the customers,

is hosted in this State;

(g) "Non-local online games provider'' means any online games

service provider who is not a local online games provider;

(h) "other stakes" means anything recognised as equivalent to money and includes virtual credits, virtual coins, virtual tokens, virtual objects or any similar thing that is purchased within, or as part of, or in relation to, an online game;

(i) "online gambling" means online wagering or betting and includes playing of any online game of chance for money or other stakes, in any manner.

Explanation.— For the purpose of this clause, wagering or betting shall be deemed to comprise the collection or soliciting of bets, the receipt or distribution of winnings or prizes, in money or otherwise, in respect of any wager or bet, or any act which is intended to aid or facilitate wagering or betting or such collection, soliciting, receipt, or distribution;

(j) "online gambling service" means a service, for online wagering or betting or for any online game of chance and the customer of the service gives or agrees to give money or put up any other stake for the purpose;

(k) "online game" means any game, whether or not there are other participants in the game, that is played on an electronic or a digital device and is managed and operated as a software through the internet or any other kind of electronic or other technology for facilitating communication;

(l) "online game of chance" includes any online game which,—

(i) involves both an element of chance and an element of skill

and the element of chance dominates over the element of skill; or

(ii) involves an element of chance that can be eliminated only by

superlative skill; or

(iii) is a game that is presented as involving an element of

chance; or

(iv) involves cards, dice, wheel or such other device, which works

on random or event generator;

(m) "online games provider" means any person who provides a

service for the conduct of any online game;

(n) "online gaming server" means any mainframe computer or set of computers, installed or maintained by the online games provider, that accepts, processes, stores and validates transactions arising out of online gaming, and which manages, monitors and controls the entire system of online gaming;

(o) "payment gateway" means, a service that authorises a user's transfer of funds between banks or fi nancial institutions to merchants without direct delivery of bank or credit card account information;

(p) "prescribed" means prescribed by rules made under this

Ordinance;

(q) "regulations" means regulations made by the Authority under

section 5;

(r) "Schedule" means the Schedule appended to this Ordinance;

(s) "State" means the State of Tamil Nadu;

Central Act

21 of 2000.

(t) words and expressions used herein and not defi ned in this Ordinance but defi ned in the Information Technology Act, 2000 shall have the meaning, respectively, as assigned to them in that Act.

CHAPTER-II.

THE TAMIL NADU ONLINE GAMING AUTHORITY.

Establishment

of Tamil Nadu Online Gaming Authority.

3. (1) The Government may, by notifi cation, establish with effect from such date as may be specifi ed in the notifi cation, an Authority to be called the Tamil Nadu Online Gaming Authority, to exercise the powers conferred on, and perform the functions assigned to it under this Ordinance.

(2) The Authority shall consist of the following Members nominated by

the Government, namely:-

(a) an offi cer, who has retired from a post not below the rank of

Chief Secretary to the Government - the Chairperson;

(b) an offi cer, who has retired from a post not below the rank of

Inspector General of Police–Member;

(c) an expert in the fi eld of information technology–Member;

(d) an eminent psychologist - Member;

(e) an expert in the fi eld of online gaming–Member.

(3) The Chairman and Members of the Authority shall receive such

salary and allowances as may be determined by the Government.

(4) The Government may, in consultation with the Authority, provide such offi cers and employees, as deemed necessary, to the Authority, for the effi cient discharge of its powers and functions under this Ordinance.

4. (1) The Authority shall perform the following functions, namely:-

Functions of Authority.

(a) regulate online games;

(b) issue certifi cate of registration to local online games providers;

(c) identify online games of chance and recommend to the

Government, for inclusion in the Schedule;

(d) oversee the functioning of the online games providers

in the State;

(e) collect and maintain information and data with regard to the

activities of the online games providers;

Central Act

21 of 2000.

(f) request the Government to take appropriate action as per the Information Technology Act, 2000, whenever deemed necessary, for the purposes of this Ordinance;

(g) resolve grievances or complaints received against any online

games provider;

(h) send periodical reports to the Government in such manner

as may be prescribed;

(i) advise the Government on any matter regarding online

gaming; and

(j) perform such other functions as may be prescribed.

(2) The Authority may constitute such number of committees from among its members, as it deems fi t, for the effi cient discharge of its duties and performance of its functions under this Ordinance.

Power to make regulations.

5. (1) The Authority may, by notifi cation, with the previous approval of the Government, make regulations consistent with the provisions of this Ordinance or the rules made thereunder, to carry out the provisions of this Ordinance.

(2) In particular and without prejudice to the generality of the

foregoing power, such regulations may provide for,—

(a) time limit, monetary limit, age restriction or such other

restrictions in regard to playing of online games; and

(b) procedure to regulate its own functions.

Power to obtain information.

6. (1) The Authority, or any offi cer empowered by it, in order to perform the functions conferred on it by or under this Ordinance, may take such steps as may be necessary to obtain any information from any online games provider or online game player.

(2) The Authority may give directions, requiring any online games provider or person in-charge of any online gaming website, establishment or premises, where any activity relating to online gaming is carried out to furnish such information as deemed necessary.

Central Act

V of 1908.

(3) The Authority shall, while discharging any of its functions under this Ordinance, have the same powers as are vested in a Civil Court while trying a suit under the Code of Civil Procedure, 1908, in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any

person;

(b) receiving oral evidence on oath or written evidence on

affi davits;

(c) requiring the discovery and production of any

document;

(d) requisitioning of any public record or copy thereof from

any court or offi ce;

(e) issuing summons for examination of witnesses or

documents; and

(f) any other matter, which may be prescribed.

CHAPTER-III.

GENERAL PROHIBITIONS.

Prohibition of

7. (1) Online gambling is prohibited.

(2) Playing of online games of chance specifi ed in the Schedule,

with money or other stakes is prohibited.

online gambling and of online games of chance.

(3) No online games provider shall provide online gambling service or allow playing of any online game of chance specifi ed in the Schedule, with money or other stakes or playing of any other online game in contravention of the regulations, in any form.

Prohibition of

advertisement.

8. No person shall make or cause to make any advertisement in any media including electronic means of communication, in this State, which directly or indirectly promotes or induces any person to indulge in online gambling or play any online game of chance specifi ed in the Schedule, with money or other stakes.

Prohibition of transfer of funds.

9. No bank, fi nancial institution or payment gateway provider shall engage in any transaction or authorization of funds towards payment for any online gambling or any online game of chance specifi ed in the Schedule.

CHAPTER-IV.

REGULATIONS FOR LOCAL ONLINE GAMES PROVIDERS.

Registration of

local online games providers.

10. (1) On and from the appointed day, no local online games provider shall provide any service for the conduct of any online game except in accordance with the certifi cate of registration duly obtained from the Authority.

(2) Every local online games provider providing any service for the conduct of any online game, immediately before the appointed day, may continue to provide such service, subject to the general prohibitions contained in Chapter-III of this Ordinance, for a period not exceeding ninety days from the appointed day:

Provided that such local online games provider applies for registration

under this section within a period of thirty days from the appointed day.

(3) Every application for registration shall be made to the

Authority in such form along with such fee as may be prescribed.

(4) On receipt of an application under sub-section (3), the Authority may, after making such enquiry as it deems necessary, either issue or refuse to issue a certifi cate of registration:

Provided that no application for issue of certifi cate of registration shall be refused, unless a reasonable opportunity of being heard is given to the applicant.

(5) Every certifi cate of registration shall be issued in such form

as may be prescribed, subject to the following conditions, namely:-

(a) The online games provider shall not provide, any online gambling service or allow playing of any online game of chance specifi ed in the Schedule, with money or other stakes;

(b) The online games provider shall neither allow nor cause

to be allowed to play any online game in contravention of the regulations.

(6) The certifi cate of registration issued under sub-section (5)

shall be valid for a period of three years.

Suspension and 11. (1) If the Authority is satisfi ed, either on a reference made to it in

this behalf or otherwise that—

revocation of certifi cate of registration.

(a) the certifi cate of registration issued under this Ordinance, has

been obtained by misrepresentation or fraud;

(b) the holder of the certifi cate of registration has failed to comply with the conditions, subject to which the certifi cate of registration has been issued; or

(c) the holder of certifi cate of registration has contravened any of

the provisions of this Ordinance, the rules or the regulations,

then, without prejudice to any other proceeding to which the holder of the certifi cate of registration may be liable, the Authority may, by an order after giving him an opportunity to show cause, revoke the certifi cate of registration by giving reasons therefor.

(2) Notwithstanding anything contained in sub-section (1), where the Authority is of the prima facie view that the certifi cate of registration granted to the online games provider must be suspended, the Authority may, do so for reasons to be recorded in writing, at any time before revoking the certifi cate.

Appeal.

12. (1) Any person aggrieved by an order of the Authority revoking or suspending the certifi cate of registration under section 11, may prefer an appeal, within fi fteen days from the date on which the order is communicated to him, to the Appellate Authority:

Provided that the Appellate Authority, may entertain the appeal after expiry of the said fi fteen days period, if it is satisfi ed that there was suffi cient cause for not fi ling it within that period.

(2) The Appellate Authority, after giving a reasonable opportunity of being heard to the appellant, shall decide the appeal as expeditiously as possible, but in any case not later than one month from the date of receipt of the appeal.

Establishment of Appellate Authority.

13. (1) The Government may, by notifi cation, establish an Appellate Authority, which shall consist of a Chairperson and not more than two other members.

(2) A person shall not be qualifi ed for appointment as the Chairperson of the Appellate Authority unless he is a retired Judge of a High Court, or is a person who is qualifi ed to be a Judge of a High Court.

(3) The qualifi cations for appointment of the members of the

Appellate Authority shall be such as may be prescribed.

(4) The Chairperson and the members of the Appellate Authority shall receive such salary and allowances as may be determined by the Government.

(5) The Government may, in consultation with the Appellate Authority, provide such offi cers and employees, as deemed necessary, to the Appellate Authority, for the effi cient discharge of its powers and functions under this Ordinance.

(6) Subject to the provisions of this Ordinance, the Appellate

Authority may regulate its own procedure.

CHAPTER-V.

REGULATIONS FOR NON-LOCAL ONLINE GAMES PROVIDERS.

Restrictions. 14.(1) No Non-local online games provider shall,—

(a) provide any online gambling service;

(b) allow playing of any online game of chance specifi ed in

the Schedule, with money or other stakes; or

(c) allow playing of any other online game contrary to the

regulations,

in this State.

(2) No Non-local online games provider shall be deemed to have contravened sub-section (1), if he has exercised due diligence or has provided geo -blocking in this State for the purpose.

(3) For the purpose of sub-section (2), a Non-local online games

provider shall be deemed to have exercised due diligence if it had,--

(a) informed prospective customers that the State prohibits online gambling and playing of certain online games to customers who are physically present in this State;

(b) required the customers to enter into contracts with an express condition that the customers shall not use the service, if they are physically present in this State;

(c) required the customers to provide personal details suffi cient to

establish that they were not physically present in this State;

(d) obtained data that indicated that the customers were not physically present in this State when the relevant customer accounts were opened and throughout the period when the service was provided to the customers; and

(e) taken all other reasonably practicable measures to ensure that no person physically present in this State could have access to online gambling service or to online games of chance prohibited under section 7.

Procedure to

deal with non- compliance of restrictions.

15. (1) Any Non-local games provider who fails to comply with any of the restriction specifi ed in section 14 shall be issued with a show cause notice by the Authority in such form and manner, as may be prescribed, to furnish a reply within such period as may be prescribed. If no reply is received or if the reply received is not satisfactory, the Authority may proceed in accordance with sub-sections (2) and (3).

Central Act

21 of 2000.

(2) The Authority shall make a recommendation to the Government to request the Central Government, or as the case may be, the offi cer specially authorized by the Central Government in this behalf, to exercise the power under section 69-A of the Information Technology Act, 2000 to block access to persons in this State to the service provided by the Non- local online games provider:

Provided that,—

(a) the Government may, for reasons to be recorded in writing,

refuse to act on the recommendation of the Authority; or

(b) where the Government accepts the recommendation of the Authority, it shall ordinarily make a request to the Central Government within fi fteen days from the date of receipt of the recommendation.

(3) A copy of the recommendation made by the Authority under sub-section (2), shall be provided to the Non-local online games provider concerned.

CHAPTER-VI.

OFFENCES AND PENALTIES.

Penalty for

contravention of sections 7, 8, 10 and 14.

16. (1) Any person who indulges in online gambling or plays any online game of chance specifi ed in the Schedule, with money or other stakes in contravention of section 7 or plays any other online game in contravention of the regulations shall be punished with imprisonment for a term which may extend to three months or with fi ne which may extend to fi ve thousand rupees or with both.

(2) Any person who makes or causes to make advertisement in any media, in contravention of section 8, shall be punished with imprisonment for a term which may extend to one year or with fi ne which may extend to fi ve lakh rupees or with both.

(3) Any person who provides, online gambling service or any online game of chance specifi ed in the Schedule with money or other stakes or any person who contravenes the provisions of sub-section (1), (2) or (5) of section 10 or section 14 shall be punished with imprisonment for a term which may extend to three years or with fi ne which may extend to ten lakh rupees or with both:

Central Act Provided that a Non-local online games provider shall be punished for contravention of section14, only if the Central Government or an offi cer specially authorised by it in this behalf, exercises the power under section 69-A of the Information Technology Act, 2000.

21 of 2000.

(4) (a) If any person convicted of an offence under sub-section (2) is again convicted of an offence under the same provision, he shall be punished with imprisonment for the second and for every subsequent offence for a term which shall not be less than one year, but may extend to three years and shall also be liable to fi ne which shall not be less than fi ve lakh rupees, but may extend to ten lakh rupees.

(b) If any person convicted of an offence under sub-section (3) is again convicted of an offence under the same provision, he shall be punished with imprisonment for the second and for every subsequent offence for a term which shall not be less than three years, but may extend to fi ve years and shall also be liable to fi ne which shall not be less than ten lakh rupees, but may extend to twenty lakh rupees.

Cognizance of offences.

17. No Court shall take cognizance of any offence punishable under this Ordinance, rules or regulations made thereunder except upon complaint in writing made by a person authorized in this behalf by the Authority.

Power to

compound offences.

18. (1) Any offi cer specially empowered by the Government, by notifi cation in this behalf, may accept, from any person who has committed an offence under sub-section (1) of section 16, by way of composition of such offence, a sum of money not exceeding the maximum amount of fi ne specifi ed for such offence but not less than fi fty per cent. of the said amount.

(2) On payment of such sum of money to such offi cer, the accused person, if in custody, shall be discharged and no further proceedings shall be taken against him in respect of such offence.

(3) The compounding of an offence under sub-section (1) shall

be allowed only once for any person.

Offences by

companies.

19. (1) Where an offence under this Ordinance has been committed by a company, every person who, at the time the offence was committed, was in-charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he had exercised all due diligence to prevent the commission of such offence.

Central Act

18 of 2013.

(2) Notwithstanding anything contained in sub-section (1), where an offence under this Ordinance has been committed by a company and it is proved that the offence has been committed with the consent or connivance of, or is attributable to, any neglect on the part of any director, manager, secretary or other offi cer of the company including key managerial personnel as defi ned in the Companies Act, 2013, such director, manager, secretary or other offi cer including key managerial personnel, shall be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly.

Explanation.— For the purposes of this section, —

(a) "company" means any body corporate and includes a fi rm or other

association of individuals; and

(b) "director" in relation to a fi rm, means a partner in the fi rm.

CHAPTER-VII.

MISCELLANEOUS.

Central Act

20. The Chairperson, every member of the Authority and of the Appellate Authority, offi cer or any other employee of the Authority and of the Appellate Authority shall, when acting or purporting to act in pursuance of any of the provision of this Ordinance be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.

XLV of 1860.

Chairperson, members, offi cers and employees of Authority and Appellate Authority to be public servants.

Protection of

action taken in good faith.

21. No suit, prosecution or other legal proceeding shall lie against any public servant in respect of anything which is done in good faith or intended to be done in the discharge of his offi cial functions or in exercise of his powers under this Ordinance, the rules, or the regulations.

Ordinance not in 22. The provisions of this Ordinance shall be in addition to, and not in derogation, of the provisions of any other law, for the time being in force.

derogation of any other law.

Presumption as 23. (1) For the purposes of this Ordinance, any online game specifi ed

in the Schedule shall be presumed to be an online game of chance.

to online game of chance and power to amend Schedule.

(2) The Government may, by notifi cation, omit or add any online game in the Schedule, on the recommendation of the Authority and upon issue of such notifi cation, the Schedule shall be deemed to be amended accordingly.

Power to make 24. (1) The Government may make rules for carrying out all or any of

rules.

the purposes of this Ordinance.

(2) (a) All rules made under this Ordinance shall be published in the Tamil Nadu Government Gazette and, unless they are expressed to come into force on a particular day, shall come into force on the day on which they are so published.

(b) All notifi cations issued under this Ordinance shall, unless they are expressed to come into force on a particular day, shall come into force on the day on which they are so published.

(3) Every rule made or notifi cation or order issued under this Ordinance shall, as soon as possible, after it is made or issued, be placed on the table of the Legislative Assembly, and if, before the expiry of the session in which it is so placed or the next session, the Legislative Assembly makes any modifi cation in any such rule or notifi cation or order, or the Legislative Assembly decides that the rule or notifi cation or order should not be made or issued, the rule or notifi cation or order shall, thereafter, have effect only in such modifi ed form or be of no effect, as the case may be, so, however, that any such modifi cation or annulment shall be without prejudice to the validity of anything previously done under that rule or notifi cation or order.

Power to remove

diffi culties.

25. If any diffi culty arises in giving effect to any provision of this Ordinance, the Government may, by an order published in the Tamil Nadu Government Gazette, make such provisions not inconsistent with the provisions of this Ordinance as may be necessary or expedient for removing the diffi culty.

THE SCHEDULE.

[See section 23]

Online Games of Chance

(1) Rummy

(2) Poker

R.N. RAVI,

1st October 2022. Governor of Tamil Nadu.

EXPLANATORY STATEMENT.

The State has the responsibility to protect the mental health of citizens and to guard against the ill-effects of gambling in any form, including betting. In this light, the State has maintained a long-standing policy of prohibiting in-person gambling and betting as refl ected in the Tamil Nadu Gaming Act, 1930 (Tamil Nadu Act III of 1930) and the Chennai City Police Act, 1888 (Tamil Nadu Act III of 1888). The spread of online gaming, especially addictive online games and gambling games played via the Internet, threatens to undo the efforts of the State. Firstly, gambling by means of electronic communication is available at all hours, from any place, and to any person who is able to access a device capable of remote communication. Secondly, online gambling often involves players competing with non-human/virtual participants, which are controlled by a variety of computer algorithms. The degree of chance or skill involved in such remote games cannot be assessed independent of the relevant algorithm or program. Lastly, remote gambling often takes place by means of virtual currencies and tokens, bypassing the State's fi nancial surveillance. Thus the online gambling considerably affects mental health of the people and has left many families in fi nancial distress, and would affect the long term prospects of the State and its population.

2. Similarly, studies show that other online games not involving gambling and betting also have negative consequences in personal, family, social, educational, occupational or other important areas of functioning of common people. Further, the school students are also affected by these games resulting in decreasing Intelligent Quotient, writing skills and creativity.

3. Thus, online gambling and online games are addictive in nature and increase the threat to public order manifold, while posing diffi culties in terms of designing appropriate regulation. A Committee headed by retired High Court Judge Thiru K.Chandru, which was constituted to advise the Government on enacting a fresh legislation on online games, has in its report, taking into account various parameters has observed that online version of any game cannot be compared with the offl ine version of the game, except in cases of word games or board games not involving any random outcome generator and that online games of chance involving random generators are known to the developers and hence are pseudo random generators; such games can be played with bots; no mechanism is available for auditing such gaming systems; and artifi cial intelligence can be used to manipulate the games and lure the players into continued indulgence.

4. On careful consideration of the report of the said Committee, the fi ndings of a survey among school teachers on the effects of online games on Government school students, research studies on the subject and the views of the stakeholders and general public and after having examined various legislative options at its disposal, the Government have decided to prohibit online gambling and to regulate online games.

5. The Ordinance seeks to give effect to the aforesaid decision.

(By Order of the Governor)

C. GOPI RAVIKUMAR,

Secretary to Government (Legislation),

Law Department.

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