TNOGA Initiates Legal Action Online Money Game Advertisers

Tamil Nadu’s Online Gaming Authority. From left to right, Thiru. Md. Nasimuddin, I.A.S.,(Retd.), Chairperson, Dr. M.C. Sarangan, I.P.S.,(Retd.), Member, Dr. C. Chellappan, Retd.Professor, Dr. O. S. Ravindran, Retd. Clinical Psychologist, Thiru. Vijay Karunakaran, Founder & CEO, InGage Group, Part Time Members.

Social Media Influencers and YouTubers Might Face Jail Time

Nearly six months after publishing a warning, the Tamil Nadu Online Gaming Authority (TNOGA) has instigated criminal prosecution under the State’s latest Online Gaming Act.

The legal action is against several social media personalities, including Instagram influencers and YouTube vloggers, and one private company. The charges could result in up to three years of jail time plus a fine between ₹5 and ₹10 lakh.

Reportedly, the Gaming Authority started by issuing Show-Cause Notices (SCN) to these persons, demanding an explanation of why access to their content should not be blocked in Tamil Nadu. Not satisfied with the answers, TNOGA brought the cases before the Metropolitan Magistrate Court in Saidapet, Chennai.

The involved internet personalities now face charges for promoting online betting and gambling. Allegedly, they “subtly” endorsed online rummy, poker, and fantasy game platforms in videos supposedly focused on food or cinema.

Nevertheless, the influencers were promising daily rewards of up to ₹10 lakh for deposits of ₹100 to ₹1000 per hour. The private company has to account for advertising gambling apps with stickers on Chennai taxis.

Film Celebrities Under Scrutiny As Well

According to sources from the State Government, a few film stars have also come under TNOGA’s radar. They have published Instagram stories, which stay visible for only 24 hours, promoting offshore apps.

Additionally, two online gaming firms have received requests to provide more registration details. If they fail to comply, TNOGA will initiate proceedings against them, a source from the Authority told reporters. So far, eight online gaming companies have registered in Tamil Nadu.

The Tamil Nadu Online Gaming Authority came into existance in August 2023 under the chairmanship of Thiru. Md. Nasimuddin, a former Indian Administrative Service (IAS) officer.

Tamil Nadu Warned About Action Against Gambling Advertisers

In May 2024, the Authority warned about pending “stringent action” against those advertising online games of chance and gambling.

The official warnings detailed the penalties for violating the State’s Online Gambling and Gaming Act. Punitive measures against gambling advertisers are imprisonment of up to one year and a fine of up to ₹5 lakh or both. Punishment for repeated offenses extends to one to three years in prison and a fine between ₹5 and ₹10 lakh.

Quoting the March 2024 advisory by the Central Consumer Protection Authority (CCPA), which explicitly targeted social media platforms, influencers, and celebrities, TNOGA points out in its press release that “there is a ban on advertisement on prohibited activities/services.”

The press release from 02 May 2024 further warned that “Action will be taken on any persons/Celebrities/Advertisement firms/ Advertisement producers/Social media platform for carrying out such advertisements. ”

The State’s Second Gaming Ban

The “Tamil Nadu Prohibition of Online Gambling and Regulation on Online Games Act, 2022” was the State’s second attempt at banning online money games, including poker and rummy, by labeling them as games of chance.

The first blanket ban on online games with money in Tamil Nadu came into force in February 2021 and came down in August 2021.

Ruling on a challenge filed by the All India Gaming Federation (AIGF) and several gaming companies, the High Court of Madras rejected the second prohibition on poker and rummy in November 2023.

The HC upheld the legality of the 2022 Act as a whole but ruled that the ban on poker and rummy was ultra vires to the Constitution due to their skill-based nature.

“Schedule to the Act deeming games of poker & rummy to be games of chance struck down. Certain other provisions of the 2022 law struck down,” tech and gaming lawyer Jay Sayta commented. “Open for state govt to impose regulations of time & money on online games of skill.”

The case is currently pending at the Supreme Court, along with the quashing of Tamil Nadu’s first online gaming ban.

TNOGA Proposes Cash & Time Limits and Night Bans

While preparing for legal action against not complying with social media influencers from other States, the Tamil Nadu Online Gaming Authority worked to propose a set of rules to regulate the games that it could not ban as per the Madras High Court prescriptions.

The proposed regulations include a daily spending limit of ₹5000 plus a monthly limit of ₹20,000. Gaming time is to be no more than four hours daily, spread over two sessions of two hours each. A complete ban on gaming activities between 00:00 and 05:00 a.m. is also among the proposals.

According to an anonymous TNOGA member quoted by the media, gaming apps should ideally show users frequent notifications about the money and time spent, the way it is done “in China, South Korea, and the UAE.”

TNOGA has also proposed tightening KYC norms through mandatory Aadhaar verification. Only the initial registration requires One-time passwords (OTPs), allowing children to misuse their parents’ devices.

“This loophole can be fixed by requiring authorized gamers of legal age to enter an OTP each time they log in,” the Gaming Authority member said.

Money In Allowed, Money Out Banned

The proposed regulations were developed after several rounds of talks with industry stakeholders. They will apply only to real-money games (RMG) where players can earn money or prizes. If no option to win a prize is at stake, the rules will not apply.

“There could be money-in in certain games but no money-out,” explained Harish Chengiah, CEO and founder of Outlier Games, who participated in the discussions with the Government.

Enforcing time and money spending limits on entertainment-oriented video games would be difficult in Tamil Nadu because the user base is small. RMGs are much more prevalent in the Southern State, Chengiah explained.