Earlier this year, the Tamil Nadu Gaming Authority introduced the Tamil Nadu Online Gaming Authority (Real Money Games) Regulations 2025 (2025 Regulations) under the Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act 2022 (TN Act).
The TN Act along with the Tamil Nadu Online Gaming Authority and Regulation of Online Games Rules 2023 were notified in April 2023. The legislation aims to establish an online gaming authority to regulate online games, certify local online game providers, address user grievances, and identify games of chance for inclusion in the list of prohibited games.
The constitutional validity of the TN Act had previously been challenged before the Madras High Court (Court), particularly over its prohibition of games of skill like rummy and poker. While the Court upheld the general constitutionality of the legislation, it struck down the schedule affixed to the legislation, which classified ‘Poker’ and ‘Rummy’ as games of chance. In its judgement, the Court also encouraged the State Government to frame regulations under Section 5 of the TN Act to address user protection concerns of the state, such as excessive monetary spending and gaming addiction. It suggested implementing reasonable restriction such as time limit, monetary cap, age restriction and similar safeguards.
The newly introduced 2025 Regulations are a step in that direction and sets out certain operational compliances for the online game providers. The key compliances include:
Minor Protection: Individuals below 18 years of age are prohibited from participating in any online game involving real money.
KYC Requirements: Online game providers must mandatorily conduct Know Your Customer (KYC) verification twice - once at the time of creating an account and again upon user’s initial login. The KYC process at the initial login must involve a two-step authentication, including the one where a one-time password (OTP) sent to the mobile number linked to the user’s Aadhaar. Online game providers should also be mindful that any authentication involving Aadhar data may trigger additional compliances requirements under the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Act 2016 and the rules issued thereunder.
Caution message: Gaming platforms must display pop-up reminders when a user has played continuously for more than one hour. Thereafter, such reminders must appear at 30-minute intervals. These messages must clearly indicate the total duration of gameplay. Additionally, the login page of the gaming site/app should display a caution message highlighting the addictive nature of the game, with the wording “online gaming is addictive in nature”.
Time and Monetary limit: Online game providers must provide users with an option to set daily, weekly, and monthly spending limits. Every time a user deposits money into their gaming wallet, a pop-up should display their set monetary limit and amount spent so far. This will enable the user to keep track of their monetary spend on the games at regular intervals.
Block hours: The 2025 Regulations also mandate imposing access restrictions on platforms, under which users will be prohibited from accessing their accounts from 12 AM till 5 AM.
Conclusion
While certain compliances, such as putting restrictions on access by minors or caution message are routine, other restrictions like having block hours or putting a time and monetary limit may deter a lot of users - particularly casual gamers. Although, these measures address the concerns raised by the government and the directive of the Court, the operational costs of implementing such safeguards coupled with a potential shrinking user base, could have a significant impact on the revenue of the gaming companies operating in Tamil Nadu.
