The Tamil Nadu Government, which last week issued new regulations on Real Money Online Games under Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022, has been actively regulating online gaming within the state, particularly in response to concerns about gambling addiction and its societal impact. In 2021, the Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021, imposed a blanket prohibition on all forms of online gaming, including games of mere skill.
However, in the landmark “Junglee Games India Private Limited vs. State of Tamil Nadu, AIR 2021 Mad 252” case, the Madras High Court struck down the amendment as unconstitutional. Following this, the state government established a five-member committee chaired by Justice (Retd.) K. Chandru, which recommended a new legal framework. Consequently, the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Ordinance, 2022, was promulgated and later enacted into law as the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 (“Act”).
The Act primarily aims to curb online gambling and regulate online gaming activities to prevent addiction, financial exploitation, and public order disruptions. It prohibits ‘online gambling’ and ‘online games of chance’ with monetary stakes, including Rummy and Poker. The law also establishes the Tamil Nadu Online Gaming Authority (“TNOGA”) to regulate and oversee gaming activities, enforce compliance, and address grievances. Moreover, the Act prescribes strict penalties for violations, including imprisonment and monetary fines, particularly for advertising or facilitating online gambling services.
New Notification on Real Money Online Games
On February 7, 2025, under Section 5(1) of the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022, the Governor of Tamil Nadu approved new regulations specifically targeting Real Money Online Games. TNOGA has been tasked with implementing and publishing these regulations in the Tamil Nadu Government Gazette.
These newly issued regulations introduce stringent requirements for online gaming platforms. One of the most significant measures is the prohibition of individuals under 18 years of age from participating in real money online games. In an effort to ensure accountability and prevent fraudulent activity, Know Your Customer (KYC) verification has been made mandatory at the account creation stage. Additionally, players must authenticate their identity using Aadhaar verification, followed by a One-Time Password (OTP) sent to their registered mobile number.
To safeguard players from excessive gaming and financial risks, the regulations mandate that gaming platforms display cautionary pop-up messages whenever a player engages in continuous gameplay for more than an hour. These messages must reappear every 30 minutes to remind users of their playing duration. Further, platforms are required to provide players with the ability to set daily, weekly, and monthly spending limits. Every time a deposit is made, a notification must alert the player about their spending limit and the amount already spent.
Moreover, in an attempt to mitigate addiction, gaming websites and applications must prominently display warning messages on their login pages, stating: “ONLINE GAMING IS ADDICTIVE IN NATURE.” Another significant measure introduced is the enforcement of a restricted playing window. Between 12:00 AM and 5:00 AM IST, players will be unable to log in to real money gaming platforms, effectively imposing a curfew to curb excessive gameplay during late-night hours.
Implications of the New Regulations
The Tamil Nadu government’s latest regulatory intervention underscores its intent to controlling online gambling and mitigating the risks associated with online gaming addiction. By enforcing stringent KYC norms, banning minors from playing real money games, and imposing structured gameplay restrictions, the state aims to protect vulnerable users from financial exploitation and gaming-related mental health concerns.
These new measures align with a broader regulatory trend in India, where multiple states have been tightening rules on online gaming to balance economic opportunities with social responsibility. The Tamil Nadu Online Gaming Authority (TNOGA) now holds the critical responsibility of ensuring compliance with these regulations, monitoring industry practices, and penalizing violators accordingly. As the online gaming sector continues to evolve, further regulatory interventions may follow to address emerging challenges and maintain consumer protection standards.
The Need for Uniformity in India’s Gaming Laws
India’s gaming industry is experiencing rapid growth, yet it remains constrained by a fragmented regulatory framework. Different states have adopted varying approaches to governing online real-money gaming, creating significant legal and operational challenges for industry stakeholders. The recent regulations proposed by Tamil Nadu highlight the need for a standardised legal approach, as they impose new compliance requirements on gaming companies operating across multiple jurisdictions. This lack of uniformity poses serious concerns for businesses and consumers alike, necessitating a national framework that ensures regulatory consistency and legal certainty.
The current regulatory landscape in India is marked by a patchwork of state laws, each with distinct provisions governing online gaming. Tamil Nadu’s 2025 Regulations introduce stringent compliance measures, including mandatory two-level KYC checks with Aadhaar verification, strict disclaimers, and spending limits. While these measures are aimed at enhancing consumer protection, they also impose an undue burden on gaming companies, requiring them to implement state-specific operational changes.
The Tamil Nadu regulations are not an isolated development. Other states, such as Karnataka and Andhra Pradesh, have also attempted to introduce restrictive gaming laws in the past, leading to legal disputes. The result is a complex and inconsistent framework where companies operating at a national and global scale must navigate multiple regulatory requirements, increasing compliance costs and legal uncertainty. The lack of a unified national law creates significant challenges for businesses attempting to expand in India’s burgeoning digital economy.
One of the major concerns with fragmented state-level regulations is their enforceability. Despite the stringent provisions in the Tamil Nadu regulations, users can bypass restrictions using VPNs or by accessing platforms from other states. This raises concerns about the effectiveness of state-specific laws in an online environment, where geographical restrictions are difficult to enforce. Additionally, the lack of uniformity leads to forum shopping, where gaming companies may choose to operate from states with more lenient regulations, further complicating enforcement efforts.
Another key issue is the overlap and potential conflict with existing central laws, such as the Information Technology Act, 2000, and the recent amendments to intermediary guidelines. A well-implemented national regulatory framework could streamline compliance requirements and reduce inconsistencies, ensuring that gaming companies operate under a predictable legal structure.
The online gaming sector in India is already grappling with significant financial pressures, particularly due to the introduction of a flat 28% Goods and Services Tax (GST) on the total value of bets for online games, regardless of whether they are games of skill or chance. This tax burden has placed considerable strain on gaming platforms, with many facing legal challenges related to tax notices and compliance disputes. The additional imposition of stringent state-level gaming regulations further exacerbates the industry’s struggles, making it difficult for companies to sustain operations and attract investment.
For the industry to thrive, it requires regulatory clarity, legal certainty, and a supportive policy environment. A fragmented regulatory structure not only increases compliance costs but also discourages innovation and foreign investment. Companies that operate globally expect a stable legal framework, and the current state-specific approach deters long-term commitments from international stakeholders.
A more effective approach would be the adoption of a centralised regulatory framework for online real-money gaming under a uniform national law. This could be achieved through amendments to the Information Technology Act or the introduction of a comprehensive gaming legislation at the central level. The recent developments in Tamil Nadu underscore the pressing need for regulatory uniformity in India’s online gaming industry. A fragmented legal approach hampers business operations, creates enforcement challenges, and undermines investor confidence. To ensure a thriving gaming ecosystem, India must adopt a centralised regulatory framework that balances consumer protection with industry sustainability. A well-structured national law would not only provide legal certainty but also position India as a competitive player in the global gaming market.
—The authors; Shruti Khanijow, is a Partner, and Darshit Sidhabhatti is an Associate, at Shardul Amarchand Mangaldas & Co., a leading corporate law firm. The views expressed are personal.