Betting on games of skill falls within State power, and online gaming laws were upheld as valid.

Betting or wagering on the uncertain outcome of a game remains "betting and gambling" within Entry 34 of List II, even where the underlying game involves skill, and the phrase is a composite constitutional expression rather than "betting on gambling". The Court held that the Tamil Nadu and Karnataka online gaming laws did not unlawfully destroy the skill-chance distinction, and were not manifestly arbitrary or disproportionate under Articles 14 and 19 because they targeted staking money on uncertain outcomes. It also held that the measures were supported by the State's public order power under Entry 1 of List II. The High Courts' common judgment was set aside and the State enactments were upheld.

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Issues: (i) Whether Entry 34 of List II authorises the State Legislature to regulate or prohibit betting on games of skill, and whether the expression "betting and gambling" is confined to betting on gambling activities; (ii) whether the impugned Tamil Nadu and Karnataka enactments were correctly tested against the settled distinction between games of skill and games of chance, and whether they were arbitrary or disproportionate; (iii) whether the State Legislatures could also sustain the impugned laws under other State List entries, including public order.

Issue (i): Whether Entry 34 of List II authorises the State Legislature to regulate or prohibit betting on games of skill, and whether the expression "betting and gambling" is confined to betting on gambling activities.

Analysis: The expression "betting and gambling" was held to be a composite constitutional phrase that cannot be rewritten as "betting on gambling". The Court reasoned that the words in the Seventh Schedule must receive a broad and liberal construction, and that the earlier decisions in RMDC-I, RMDC-II, and K.R. Lakshmanan did not decide that betting on games of skill lies outside Entry 34. Those cases were distinguished as dealing with different factual settings and with statutory exemptions for games of skill, not with the constitutional power to regulate staking on uncertain outcomes. The Court further held that staking money on the uncertain outcome of a game, even if the underlying game involves skill, is itself betting and therefore falls within Entry 34.

Conclusion: The State Legislature's power under Entry 34 extends to betting on games of skill, and the impugned laws were not beyond legislative competence on that ground.

Issue (ii): Whether the impugned Tamil Nadu and Karnataka enactments were correctly tested against the settled distinction between games of skill and games of chance, and whether they were arbitrary or disproportionate.

Analysis: The Court held that the impugned laws did not unlawfully obliterate the skill-chance distinction merely because they targeted staking on online games. It reasoned that once money is risked on an uncertain outcome, the activity assumes the character of betting and gambling, regardless of whether the underlying game is one of skill. On that basis, the Court rejected the challenge founded on Article 14 and Article 19, and held that the measures were not manifestly arbitrary or disproportionate. The Court also accepted the legislative concern that online money gaming had caused addiction, financial losses, suicides, and wider social harm.

Conclusion: The impugned enactments were not manifestly arbitrary or disproportionate and did not fail on the Article 14 or Article 19 challenge.

Issue (iii): Whether the State Legislatures could also sustain the impugned laws under other State List entries, including public order.

Analysis: The Court held that public order has a wide constitutional amplitude and includes activities that disturb the even tempo of community life, public tranquillity, public health, and social order. It found a proximate nexus between rampant online money gaming and harms such as addiction, debt, and suicides, and concluded that these consequences could justify State action under Entry 1 of List II. The Court treated the legislative measures as supported by empirical material and as aimed at restoring public tranquillity and protecting the public at large.

Conclusion: The impugned laws were also supported by the State's public order power under Entry 1 of List II.

Final Conclusion: The common judgment of the High Courts was set aside, and the State appeals were allowed. The impugned State enactments were upheld as intra vires the Constitution.

Ratio Decidendi: Betting or wagering on the uncertain outcome of a game remains betting and falls within the State's regulatory power under Entry 34 of List II even if the underlying game is one of skill; such legislation may also be sustained where the activity threatens public order and public tranquillity.

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