Supreme Court defers hearing on online gaming law petitions to November

The Supreme Court on Tuesday deferred hearing on petitions filed by gaming companies challenging the law that banned money gaming to November.

A bench of Justices J.B. Pardiwala and K.V. Viswanathan heard the matter briefly and said it would be taken up after the Diwali vacation.

Lawyers representing gaming companies, including lead petitioner Head Digital Works Private Ltd, sought interim relief, arguing that the law had shut down their businesses completely, forcing layoffs.

“This has national ramifications. We are in a position where our business is completely closed. There’s no avenue to function, and employees have been laid off. It’s a huge issue for us,” senior advocate C.A. Sundaram told the court.

Additional solicitor general N. Venkataraman noted that there might be an overlap between the fresh petitions challenging the constitutionality of the new law and the earlier case on the 28% GST on online gaming, where the court had heard arguments extensively and reserved judgment.

“The overlap is on this ground. Councils who argued those matters did so vehemently. Only the Union has powers; now the councils are arguing that the Union has no powers,” he added.

It is to be noted that the bench led by Justice J.B. Pardiwala only heard and reserved the judgment in the 28% GST matter earlier.

Senior advocate Sundaram, in response, clarified that the challenge was not to the Union’s legislative power to frame laws on online gaming, but to the manner in which that power was exercised.

“I argued in the other matters in Tamil Nadu and Karnataka, where I had expressly submitted that the states had no legislative power. Legislative power, if anything, would be with the Union. I stand by that. I am not here challenging the Union’s legislative power. I am challenging the exercise of that power,” he said.

The matter reached the Supreme Court after it allowed the Centre’s plea to club petitions originally filed before the high courts of Madhya Pradesh, Karnataka, and Delhi.

The bench clarified that all proceedings pending before these high courts regarding challenges to the new law will now be heard only by the Supreme Court, and the high courts will no longer entertain related petitions. Both the Centre and petitioners had requested consolidation of all cases.

What happened earlier

In September, the Madhya Pradesh High Court rejected an appeal by Clubboom11 Sports & Entertainment Pvt. Ltd, a Gwalior-based gaming firm, seeking a stay on the government’s notification of the law. In those hearings, solicitor general Tushar Mehta told the court that the legal issues and precedents cited before the high courts had already been extensively argued before Justice Pardiwala’s bench in the 28% GST case on online gaming, where the order is pending.

The law, passed in August, prohibits all online games involving monetary transactions. Similar petitions were also filed before the Karnataka and Delhi high courts, including one by Bagheera Carrom OPC Pvt. Ltd., but neither court granted interim relief.

The legal tussle follows a rapid sequence of events in August, when the Union Cabinet cleared and passed the legislation within five days. Information and technology minister Ashwini Vaishnaw defended the move, citing research linking platforms such as Dream11, RummyCulture, My11Circle, and Mobile Premier League to gambling and money laundering.

The ban has already hit the industry. As Mint reported on 1 September, firms including Games24x7, MPL, and Baazi Games have begun layoffs, with more expected. Industry associations had earlier told Union home minister Amit Shah that the blanket ban could threaten over 200,000 jobs across more than 400 companies.

Despite industry pushback, the Centre has stood firm. On 23 August, ministry of electronics and information technology (MeitY) secretary S. Krishnan told Mint that the government had “followed all constitutional requirements to frame the law and is ready for any legal challenges mounted against it.”

This is not the first time the Supreme Court has consolidated disputes in the sector. In 2024, it transferred 27 writ petitions from nine high courts challenging the 28% GST on online real-money gaming to itself.