Does playing rummy count as gambling? Do rummy websites allowing stakes break the law? These were the questions before the Supreme Court in a three-year case that didn’t attract banner headlines but did attract the best legal eagles, such as Abhishek Manu Singhvi, Kapil Sibal and P Chidambaram. Finally, when the judgement came, the resolution was provided by the lack of a clear decision.
For three years, multi-million dollar online rummy companies, along with rummy clubs, were fighting in the Supreme Court for legal clarity on the question of whether playing rummy for stakes and charging a fee or commission from players is permitted. In mid-August this year, the apex court declined to take a stand. It dismissed a bunch of petitions filed by rummy websites and clubs, paving way for them to continue running.
The Background
Gaming legislations in all Indian states, except Assam and Odisha, exempt “games of mere skill” from criminal liability. Thirteen-card rummy, which was already popular in clubs, became part of the game-of-skill category as far back as in 1967, when a Supreme Court verdict deemed it to involve considerable amount of skill because of the memory required to remember the falling cards.
Following that verdict, rummy clubs flourished across the country for decades. On the few occasions that the police harassed club owners, they approached High Courts and the police were directed not to interfere in lawful rummy activities. Making use of this legal position, some start-ups launched real money rummy on the internet a few years ago. Everyone then operated on the assumption that the legality of rummy was not in doubt. This certainty melted away around 2011.
A club in Chennai, Mahalakshmi Cultural Association, was raided by the police on the allegation that it permitted gambling. Soon after, the club approached the Madras High Court to direct the police not to interfere in the lawful game of rummy played for stakes at its premises. A single judge ruled in the club’s favour. But a division bench of the High Court, while hearing an appeal by the state government, ruled that rummy for stakes was not permitted.
When the club appealed in the apex court in 2012, a bunch of online rummy companies and rummy clubs intervened in the matter, feeling the order would prejudicially affect them.
After more than half a dozen adjournments, the Supreme Court asked the Tamil Nadu and central governments to state their stand on the legality of online rummy. Neither had one. Nevertheless, the state of Tamil Nadu insisted that physical rummy was illegal as per gaming legislations.
Regulatory framework
From the beginning, it appeared that the Supreme Court was not inclined to entertain the Tamil Nadu government’s plea. But it decided that no conclusive order was required to decide the issue on two grounds: one, the police had not alleged during trial that rummy was being played at the Mahalakshmi Cultural Association; second, there was no litigation in India where online rummy was the subject matter.
As a result, in August, the apex court decided to dismiss the petitions. While passing the order, the Supreme Court noted that the observations and ruling of the High Court in the case of Mahalakshmi Cultural Association would not survive.
By declining to look into the model of online and offline rummy operators, the Supreme Court has left it to state and central governments to take a stand on it. Recognising this need, the government of Nagaland had already introduced a bill in the legislative assembly to regulate and license online skill games such as rummy, bridge, nap, poker and fantasy sports, which may be passed by the end of this year. Now it is for the other state governments to form regulatory framework for the over Rs 500-crore online rummy industry.
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For three years, multi-million dollar online rummy companies, along with rummy clubs, were fighting in the Supreme Court for legal clarity on the question of whether playing rummy for stakes and charging a fee or commission from players is permitted. In mid-August this year, the apex court declined to take a stand. It dismissed a bunch of petitions filed by rummy websites and clubs, paving way for them to continue running.
The Background
Gaming legislations in all Indian states, except Assam and Odisha, exempt “games of mere skill” from criminal liability. Thirteen-card rummy, which was already popular in clubs, became part of the game-of-skill category as far back as in 1967, when a Supreme Court verdict deemed it to involve considerable amount of skill because of the memory required to remember the falling cards.
Following that verdict, rummy clubs flourished across the country for decades. On the few occasions that the police harassed club owners, they approached High Courts and the police were directed not to interfere in lawful rummy activities. Making use of this legal position, some start-ups launched real money rummy on the internet a few years ago. Everyone then operated on the assumption that the legality of rummy was not in doubt. This certainty melted away around 2011.
A club in Chennai, Mahalakshmi Cultural Association, was raided by the police on the allegation that it permitted gambling. Soon after, the club approached the Madras High Court to direct the police not to interfere in the lawful game of rummy played for stakes at its premises. A single judge ruled in the club’s favour. But a division bench of the High Court, while hearing an appeal by the state government, ruled that rummy for stakes was not permitted.
When the club appealed in the apex court in 2012, a bunch of online rummy companies and rummy clubs intervened in the matter, feeling the order would prejudicially affect them.
After more than half a dozen adjournments, the Supreme Court asked the Tamil Nadu and central governments to state their stand on the legality of online rummy. Neither had one. Nevertheless, the state of Tamil Nadu insisted that physical rummy was illegal as per gaming legislations.
Regulatory framework
From the beginning, it appeared that the Supreme Court was not inclined to entertain the Tamil Nadu government’s plea. But it decided that no conclusive order was required to decide the issue on two grounds: one, the police had not alleged during trial that rummy was being played at the Mahalakshmi Cultural Association; second, there was no litigation in India where online rummy was the subject matter.
As a result, in August, the apex court decided to dismiss the petitions. While passing the order, the Supreme Court noted that the observations and ruling of the High Court in the case of Mahalakshmi Cultural Association would not survive.
By declining to look into the model of online and offline rummy operators, the Supreme Court has left it to state and central governments to take a stand on it. Recognising this need, the government of Nagaland had already introduced a bill in the legislative assembly to regulate and license online skill games such as rummy, bridge, nap, poker and fantasy sports, which may be passed by the end of this year. Now it is for the other state governments to form regulatory framework for the over Rs 500-crore online rummy industry.
