Introduction
One of the rapidly expanding sectors of the digital economy, the online real-money gaming (hereinafter referred to as “RMG”) industry in India has been a matter of a severe legal reckoning in the state of Tamil Nadu.
In a landmark case in Play Games 24×7 Private Limited and Ors. v. State of Tamil Nadu (W.P. Nos. 6784, 6794, 6799, 6970, 8832 and 13158 of 2025), the Madras High Court upheld the validity of Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 and the Tamil Nadu Online Gaming (Real Money Games) Regulations, 2025. The decision rejected constitutional claims of major gaming sites and confirmed the authority of the State to regulate online gambling based on the reasons of health and consumer protection.
The primary points of judicial contention were two specific provisions i.e., the KYC requirement of the Aadhaar and the “Blank Hours” of 12a.m to 5 a.m. on Real Money Game (RMG) logins. The rationale of the Court offers a critical precedent in weighing the digital rights, privacy, and State intervention in the digital economy, especially when gaming addiction and monetary loss are perceived as a matter of the public health issue.
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Background and Regulatory Framework
This was after an earlier decision by the Madras High Court in All India Gaming Federation v. The State of Tamil Nadu (W.P.Nos.13203 of 2023), which confirmed the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022, but invalidated the Schedule that defined Rummy and Poker as a game of chance. The state of Tamil Nadu then introduced the Tamil Nadu Online Gaming (Real Money Games) Regulations, 2025. These Regulations had a number of compliance requirements concerning internet gaming intermediaries such as age-gating, financial disclosure, and restrictions on playtime.
It is noteworthy that Regulation 4(iii) required verification on the basis of Aadhaar, whereas Regulation 4(viii) had a so-called blank hour between 12 a.m. and 5 a.m., during which a real-money gaming activity was not possible. The gaming corporations argued that such moves constituted the unconstitutional headlong action, which infringed on their right to commerce under Article 19(1)(g) and the right of users to privacy under Article 21 to the Constitution.
The “Blank Hours” Controversy: Public Health vs. Personal Autonomy
The Petitioners claimed that the five hours ban on real-money gaming per night was arbitrary, disproportionate and ultra vires to the Section 5 of the parent Act. They argued that the provision only permits player related prohibitions, i.e., time, age, or money exposures, but not the State to prohibit the entire platform.
The state also referred to scientific articles which proved that:
- the lack of sleep at late-night hours and impulse control because of the lower activity of prefrontal cortex
- gaming at night only condition worsening sleep deprivation, anxiety and addictive tendencies.
- self-control and rational expenditure are significantly reduced at night, making it more likely to suffer financial damages.
These submissions were persuasive to the Court and the regulation was upheld with regard to the fact that the protection of mental health and suicidal prevention are a strong public interest as categorized under Articles 21 and 47 of the Indian Constitution.
The Bench believed that the test of proportionality was passed, as the measure was narrow, backed by empirical evidence and had a limited scope. The negative effect of unregulated late-night gaming, as noted in judgment, is by far much more significant than commercial inconvenience. The role of the State to maintain the health of the population is central.
The Aadhaar Mandate: Privacy, Proportionality, and Digital Safeguards
The second big issue was about Regulation 4(iii) according to which all players involved in RMG are required to undergo identity verification basing on Aadhaar. According to the Petitioners, such Aadhaar-only condition was contrary to the Section 4(7) of the Aadhaar Act 2016 and the principles of privacy, which were laid down in Justice K.S. Puttaswamy (Retd.). v. Union of India, (2017) 10 SCC 1.
They argued that the requirement was unreasonable and disproportionate especially since the Reserve Bank of India accepts a variety of Next Officially Valid Documents (“OVDs”) to perform the KYC check including passports or voter IDs. Also, as minors also have Aadhaar, this mechanism was claimed to be inefficient in preventing underage gaming.
The State justified the order as a safety protocol on the people based on a two-factor authentication system, utilizing the integration of Aadhaar verification and OTP-based ownership checks to prevent identity theft and fake play. It highlighted that Aadhaar authentication does not provide other documents with real time verifiability, and these documents are not disclosing personal or biometric information to the gaming intermediaries and the action is a clear step to achieving the goal of securing minors and stopping proxy participation.
The Court affirmed the Aadhaar-based KYC requirement, referring to it as a required infrastructure to successful implementation of age and identity limitations in the digital gaming sector. It deemed the measure to be proportionate, which passes the Puttaswamy test of necessity, and which entails minimal intrusion into privacy. The extent of manipulation or deception, as observed by the Bench is relatively less in Aadhaar verification, the protection is justifiable, operative and proportionate to the legitimate purpose of the State.
Legislative Competence and the Federal Balance
The Court also took into account the case of legislative competence, dismissing the argument that the regulation of online gaming is the prerogative of the Union List (Entry 31: posts and telegraphs, communication, and broadcasting). By use of the doctrine of pith and substance, the Bench determined that the main aim of the Tamil Nadu legislation was to govern trade and commerce in the State and to protect the health of people, which were considered in Entries 26 and 6 of the State List.
The Court also made it clear that no repugnancy existed between the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022 and the Information Technology Act, 2000 (the “IT Act”) as the laws take place in different arenas i.e. the IT Act regulates technology and intermediaries, whereas the State law pursues the issue of the well-being of people.
This argument represents a more general jurisprudential insight that the digital regulation is not the sole province of the Union, in particular when the well-being and the health of the population on the state level is directly at stake.
AMLEGALS Remarks
The judgment marks a significant step in recognizing public health as a constitutional ground for regulating online gaming under Articles 21 and 47. The Madras High Court viewed the issue through a welfare lens, upholding restrictions like the midnight ban and Aadhaar-based KYC as reasonable and proportionate safeguards against gaming addiction and financial harm.
Reaffirming that privacy is not an absolute right, the Court applied the Puttaswamy test to justify limited intrusions in pursuit of legitimate State objectives. It adopted a pragmatic stance on Aadhaar, prioritizing verification efficiency and fraud prevention, provided that data use remains minimal and consent-based.
The decision also underscores federal coexistence in digital regulation, allowing Central and State frameworks to operate concurrently when their purposes differ but complement each other. While constitutionally sound, the ruling reflects an emerging judicial acceptance of State control in digital domains, leaving open the larger question of how far regulation can extend before it begins to constrain individual autonomy in India’s growing digital economy.