The Andhra Pradesh High Court, hearing challenges to the amended Andhra Pradesh Gaming Act, 1974, directed an independent committee to examine how online rummy is played. This article sets out the settled law, the rival submissions and the court’s order.
The only question left unanswered: is online rummy also a game of skill?
Writ petitions were filed by Play Games 24x7 Private Limited, Junglee Games India Private Limited and Head Digital Works Private Limited, all online gaming companies, before the Hon’ble High Court of Andhra Pradesh, challenging the vires of the amendments to the Andhra Pradesh Gaming Act, 1974 as unlawful, arbitrary and ultra vires Articles 14, 19(1)(g) and 21 of the Constitution of India.
To have a correct understanding of the question being addressed here, let me start by emphasising the settled legal positions with respect to operating and playing a “game of skill”, which have already been answered by the Apex Court.
The Settled Position
The Deciding Factor Between a Game of Skill and a Game of Chance
In order to decide whether a game is a “game of skill” or a “game of chance”, the deciding factor is what is predominant in the game: skill or chance.
— State of Bombay v. R.M.D. Chamarbaugwala, 1957 SCR 874
Rummy Is a Game of Skill
The game of rummy requires a certain amount of skill, because the fall of the cards has to be memorised and the building up of rummy requires considerable skill in holding and discarding cards.
— State of Andhra Pradesh v. K. Satyanarayana and Ors., AIR 1968 SC 825
Running a Business for a Game of Skill Is Legal in India
Protection under Article 19(1)(g) is given only to those games where the element of skill predominates over the element of chance, which are therefore “games of skill”, and the right to make a profit from such a business activity is protected under Article 19(1)(g) of the Constitution of India.
— State of Bombay v. R.M.D. Chamarbaugwala, 1957 SCR 874; R.M.D. Chamarbaugwala v. Union of India, 1957 SCR 930
The State Cannot Legislate to Ban a Game of Skill (Scope of Entry 34 in the State List)
A game that does not involve a predominant element of skill is a game of chance. Under Entry 34 of the State List, the State can only regulate gambling, that is, games of chance, and cannot ban a game of skill.
— State of Bombay v. R.M.D. Chamarbaugwala, 1957 SCR 874; State of Andhra Pradesh v. K. Satyanarayana and Ors., AIR 1968 SC 825; Dr. K.R. Lakshmanan v. State of Tamil Nadu and Anr., (1996) 2 SCC 226
The State’s Analysis Before Amending the Andhra Pradesh Gaming Act, 1974
Before the Hon’ble High Court of Andhra Pradesh, the State submitted that online rummy is a game of chance, as it can be easily manipulated by the online gaming platform. Some of the major differences between online rummy and physical rummy mentioned by the State are set out below.
| Aspect | Offline rummy | Online rummy |
|---|---|---|
| Shuffling and distribution of cards | Shuffling happens physically in front of all the players, so there is limited scope for manipulation or for knowing the identity of the cards. | Shuffling is not visible to the players. The online dealer has full visibility of the cards being distributed and can manipulate the distribution. |
| Collusion among players | The players and the dealer are different, and the dealer is usually one of the players. If players collaborate, it will be evident to the others. | The dealer (the company) has its own players, who disguise themselves as normal players and are available at any time. Two players can collaborate without the knowledge of another player. |
| Minors | If a minor is playing for stakes, it is easy to ascertain. | There is no mechanism for authentication. Any minor asserting that he is a major is allowed to play. |
| Distribution of winnings | The player who wins gets the winnings immediately. | Winnings are converted into coins or coupons, which can be used for further play. The user receives money only on redemption through the bank, which takes at least 24 hours. |
| Volume | The game cannot be played by a large number of people, is played in small groups, and is not available around the clock. It is played mainly for recreation. | The number of players is greater and the game can be played 24 hours a day, seven days a week, increasing the volume of play. A game played for recreation has become an institution. |
| Redressal of disputes | Any cheating or manipulation can be redressed by the dealer and the players. | If cheating or manipulation arises, the player has no means of seeking redress, since he neither knows the other players nor has access to the dealer. |
Submissions of the Online Gaming Platforms: Online Rummy and Physical Rummy Are the Same
The online gaming companies made the following averments to show that online rummy involves the elements of skill required in physical rummy, such as memorising the fall of cards and holding and discarding cards, by which the element of skill predominates over the element of chance.
- Every game has a “Join” button associated with it, and a player can join the virtual game table by clicking on this button.
- Once a player joins a game table, the entry fee specified for that game is held as “in-play” and deducted from the user’s account at the end of the game.
- Cards are dealt randomly by Random Number Generator (“RNG”) software certified by an independent, globally renowned IT audit agency (iTech Labs, Australia), a certification used by most online card gaming companies across the world.
- The players play the game according to the standard rules of rummy as published on the platform, which are akin to the rules of rummy played in any form whatsoever.
- At the end of the game, the winner gets the entire winning amount minus the predetermined service charge or platform fee, which is deducted by the company depending on the game and stake type.
- The players’ deposits are encrypted with 128-bit SSL. The RNG further ensures that there is no bias or tampering in the way cards are assigned to users.
- No information about the cards dealt is shared with any party, and only a player has information about the cards assigned to him or her.
- Players’ information is stored in a secure environment and is not shared with any third party except for the purpose of providing the platform’s services.
- The company enters into a non-disclosure agreement with all such players.
- The seating of players is random, and no seat is prefixed for any game.
- Players therefore have no control over the selection of other players on any table or their position at the table.
- Players logged in from the same IP address, located next to each other or at the same GPS location are not allocated seats at the same table.
- Information about the playing cards is always encrypted, preventing any third party from viewing it.
- Anti-fraud algorithms are applied to check whether players tried to defraud anyone after the completion of games, and appropriate action is taken under the terms of service of the portal.
- Constant improvements are made to the platform to ensure fair and secure gameplay through the deployment of the latest software and technical solutions.
Observation of the Hon’ble High Court of Andhra Pradesh
“The Court cannot rule out the chance of the company having its own players in the guise of normal players, as the game is played virtually and one will not know against whom he is playing and scope of minors playing Online Rummy by asserting as major, cannot be ruled out these disputed question of facts more so, when there is a regulation in time limit for discarding a card and when the game can be played from any place, even by a minor, being not in dispute. We feel that pending writ petitions, it would be just and proper to direct the State Government to constitute a Committee consisting of a Judicial, Independent-Technical and Non-Technical Members [nothing to do with the Government], Two persons representing the platform operators, one Police Officer of the rank of Director General [well-versed in Information Technology] as Members of Committee and/any other Member representing the Government, to examine and submit a report as to the manner in which the Online Rummy is being played, within a period of Four [4] weeks from the date of receipt of a copy of this order. This exercise in our view is necessary for the reason that all the above issues raised for consideration would depend upon the manner in which Online Rummy is played, namely whether it is game of skill or game of chance”
Conclusion: The Interesting Element of This Order
A similar direction to constitute a committee was also passed by the High Court of Judicature at Madras. For the first time, however, preference has been given to bringing on board technical experts and representatives of the online gaming platforms, in order to have an in-depth study of the functioning of online rummy. In the past, such committees were led by representatives of the State. Here, it has been specifically stated that independent technical and non-technical members, having nothing to do with the Government, are to be brought on board for this report. It appears to be the first unbiased effort on the part of the judiciary to study the functioning of online rummy.
