The rapid growth of real money gaming platforms has posed a persistent regulatory puzzle for Indian states. At its heart lies a deceptively simple question: can a state government prohibit online betting when the underlying game be it rummy, poker, or fantasy sports is commonly regarded as one of skill? The High Courts of Madras and Karnataka both sided with the gaming industry, holding that Entry 34 of the State List (betting and gambling) could not extend to games of substantial skill and that blanket prohibitions on such games of skill violated Article 19(1)(g) of the Constitution. The Supreme Court, in its judgment dated May 27, 2026 in the case of State of Tamil Nadu & Ors. v. Junglee Games India Pvt. Ltd. & Ors.[1], reversed the previous High Court decisions in their entirety, upholding the constitutional validity of state laws prohibiting real money gaming.
Background
The case consolidates challenges to legislations enacted by Tamil Nadu and Karnataka. In Tamil Nadu, the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021 introduced a new provision prohibiting wagering or betting in cyberspace, including on games of skill such as rummy and poker. A subsequent enactment, the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Gaming Act, 2022/23, classified rummy and poker as games of chance in its Schedule. Further, in Karnataka, the Karnataka Police (Amendment) Act, 2021 similarly removed the statutory exemption for skill-based games and imposed a comprehensive embargo on online gaming with monetary stakes.
Both sets of legislations were struck down by the High Courts on one common ground that ‘betting’ in Entry 34 must be read conjunctively with ‘gambling’ and since gambling involves only games of chance, states lack legislative competence to regulate betting on skill-based games. The blanket prohibition was additionally held to fail the least intrusive measure test.
Court’s Analysis and Findings
Scope of Entry 34
The Supreme Court held that both the High Courts had committed an egregious error in narrowly interpreting Entry 34. Drawing on the Constituent Assembly Debates, the Court noted that Dr. B.R. Ambedkar had specifically cautioned that deleting Entry 45 (the precursor to Entry 34) would leave state governments helpless in regulating betting and gambling. The Debates also record Shri T.T. Krishnamachari confirming that the Bombay Government’s order to prohibit rummy played for stakes was squarely within the powers conferred by Entry 45. The founding intent, the Court held, was to empower states to regulate and even prohibit betting on games of skill when played with monetary stakes. To read betting and ‘gambling’ as ‘betting on gambling activities’ would amount to rewriting the constitutional text, something which courts are not entitled to do.
Distinguishing RMDC and K.R. Lakshmanan
The Respondents relied heavily on the judgments in State of Bombay v. R.M.D. Chamarbaugwala[2], R.M.D. Chamarbaugwala v. Union of India[3] and Dr. K.R. Lakshmanan v. State of Tamil Nadu & Anr.[4]. The Supreme Court in its judgment distinguished each of these cases. The RMDC cases were concerned with whether skill based competitions fell within a specific statutory definition of ‘prize competition’ and had never intended to regulate or consider the scope of ‘betting’ under Entry 34. The Court further held that the case of K.R. Lakshmanan was decided on the narrow question of whether horse racing qualified for a statutory exemption created by the state legislature itself and did not interpret Entry 34 at all.
More fundamentally, the Court held that even if games of skill do not constitute gambling in the strict sense, that does not insulate betting on those games from state legislative competence. Once the element of betting enters the picture, the nature of the underlying game ceases to be relevant. The constitutional protection afforded to games of skill does not extend to the act of betting on those games.
Manifest Arbitrariness, Proportionality, and Public Order
The manifest arbitrariness argument raised by the gaming companies was rejected by the Court holding that since both chance based and skill based games, when played with monetary stakes, carry the same potential for addiction and financial harm, there is no infirmity in the legislature treating them alike. The proportionality claim was also rejected stating that activities falling within betting and gambling are res extra commercium, and where protections under Article 19 of the Constitution of India are unavailable, the proportionality review does not arise.
The Court also held that the state legislatures independently derived competence from ‘public order’ under Entry 1 of the State List. Referring to empirical data on suicides, addiction, and financial distress, including the Justice Chandru Committee report relied upon by Tamil Nadu, the Court held that online real money gaming has a proximate and direct impact on public tranquillity and public health.
Key Takeaways
This judgment considerably expands the regulatory space for state governments and effectively closes the argument that skill-based gaming platforms are constitutionally untouchable.
Three aspects of the judgment warrant particular attention. First, treating ‘betting’ as a free-standing legislative field within Entry 34 that extends to skill-based games is a decisive departure from the position taken by multiple High Courts, with significant consequences for real money gaming companies that had been operating in reliance on those rulings. Second, the finding that res extra commercium forecloses proportionality review removes what had been a meaningful constitutional safeguard for operators. Third, grounding the legislations independently in ‘public order’ gives states a second overlapping constitutional basis, making future challenges harder to sustain.
The judgment must also be read alongside the Promotion and Regulation of Online Gaming Act, 2025 (“PROGA“), which came into effect on May 1, 2026 along with the Promotion and Regulation of Online Gaming Rules, 2026. The PROGA imposes a comprehensive ban on online money gaming at the Central level and establishes the Online Gaming Authority of India as the sector’s regulator. Read together with the Supreme Court’s judgment upholding state level prohibitions, the real money gaming industry now faces regulatory closure at both levels, a Central-level ban under PROGA and constitutionally valid state-level prohibitions under the impugned legislations.
Conclusion
The Supreme Court’s decision therefore significantly reshapes the constitutional landscape for online gaming in India. By holding that Entry 34 extends to betting on games of skill, RMDC jurisprudence did not restrict state competence, and that proportionality review is unavailable where the activity is res extra commercium, the Court has armed state governments with powers to prohibit real money gaming. For the online real money gaming industry, the skill versus chance distinction, which was its primary constitutional defence for years, is no longer a viable shield against regulation.
[1] Civil Appeal Nos. 6124-6131 of 2023.
[2] AIR 1957 SC 699.
[3] AIR 1957 SC 628.
[4] (1996) 2 SCC 226.
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