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Issues: (i) Whether Entry 34 of List II empowers the State Legislature to regulate and prohibit betting on games of skill, including online games played for stakes; (ii) whether the impugned Tamil Nadu and Karnataka enactments are unconstitutional for manifest arbitrariness, disproportionality, or violation of fundamental rights; (iii) whether the State Legislatures could also sustain the enactments under Entry 1 of List II on the ground of public order.
Issue (i): Whether Entry 34 of List II empowers the State Legislature to regulate and prohibit betting on games of skill, including online games played for stakes.
Analysis: The expression "betting and gambling" in Entry 34 was held to be a composite and familiar constitutional phrase, not to be recast as "betting on gambling". The Court reasoned that staking money on an uncertain outcome is the core feature of betting and gambling, and that this feature does not disappear merely because the underlying game is one of skill. The earlier decisions in RMDC-I, RMDC-II, and K.R. Lakshmanan were treated as context-specific and not as limiting State power to games of chance alone.
Conclusion: Entry 34 authorises the State to legislate against betting on games of skill, including online staking on such games, and the impugned enactments were within legislative competence on that ground.
Issue (ii): Whether the impugned Tamil Nadu and Karnataka enactments are unconstitutional for manifest arbitrariness, disproportionality, or violation of fundamental rights.
Analysis: The Court held that once staking on games of skill is treated as betting and gambling, the activity becomes res extra commercium and does not enjoy protection as a fundamental business right. On that footing, the challenge based on Article 14 and proportionality was rejected. The Court also accepted the legislative assessment of harms such as addiction, financial loss, and suicides, and held that the laws were supported by empirical material and a rational nexus with the object of curbing online money gaming.
Conclusion: The impugned enactments were not manifestly arbitrary or disproportionate and did not violate Articles 14 or 19.
Issue (iii): Whether the State Legislatures could also sustain the enactments under Entry 1 of List II on the ground of public order.
Analysis: The Court held that public order has a wide amplitude and includes public tranquillity, public safety, and, in appropriate cases, social and economic disturbances affecting the community at large. It concluded that the widespread harms attributed to online money gaming, including addiction, indebtedness, and suicides, had a proximate nexus with public order and public health concerns.
Conclusion: The enactments were also supportable under Entry 1 of List II as measures concerning public order.
Final Conclusion: The State appeals succeeded, the contrary High Court judgments were set aside, and the challenged Tamil Nadu and Karnataka provisions were upheld as constitutionally valid.
Ratio Decidendi: Betting on the uncertain outcome of a game remains betting and gambling even if the underlying game involves skill, and the State may regulate or prohibit such activity under Entry 34 of List II, with public order supplying additional support where the activity substantially affects the community.
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