Introduction
On August 22, 2025, The Promotion and Regulation of Online Gaming Bill, 2025, received Presidential assent, culminating in the enactment of The Promotion and Regulation of Online Gaming Act, 2025 (hereinafter “the Act”). The legislation marks the Union Government's most assertive step towards creating a comprehensive national framework for the burgeoning online gaming sector. The Act's stated objectives are twofold: to foster the growth of permissible online gaming, such as e-sports and social games, and to impose a stringent, nationwide prohibition on “online money games,” defined broadly to include any game involving financial stakes, irrespective of the element of skill or chance.
While the Act is a response to pressing societal concerns—including gaming addiction, financial distress, and the use of gaming platforms for money laundering—it has ignited a profound constitutional debate. The crux of the controversy lies in the legislative competence, or vires, of the Parliament to enact such a law. Under the Seventh Schedule of the Constitution of India, which delineates the legislative domains of the Union and the States, “Sports and Entertainments” is unambiguously listed as Entry 33 and “Betting and gambling” as Entry 34 of List II (the State List). This placement prima facie grants State legislatures the exclusive authority to legislate on the subject.
This article exhaustively examines the constitutional validity of the Act through the lens of India's federal structure and the principles of legislative competence. It delves into the intricate scheme of power distribution enshrined in the Constitution and analyses the judicial doctrines developed by the Supreme Court of India to resolve conflicts arising from overlapping legislative fields. The central question addressed is whether the Parliament, in enacting a law that effectively regulates and prohibits a form of gaming, has unconstitutionally encroached upon a domain exclusively reserved for the States.
The Constitutional Scheme of Legislative Powers: A Clear Demarcation
The foundation of India's federalism is embedded in Article 246 of the Constitution, which, read with the Seventh Schedule, distributes legislative powers between the Parliament and State legislatures. The Seventh Schedule comprises three lists:
- List I (the Union List): Enumerates subjects over which the Parliament has exclusive power to legislate.
- List II (the State List): Enumerates subjects over which State legislatures have exclusive power.
- List III (the Concurrent List): Lists subjects where both the Parliament and State legislatures can make laws, with Union law prevailing in case of a conflict.
This architectural design is not merely a matter of administrative convenience but a cornerstone of the federal balance of power. The exclusivity of the State List is a sacrosanct principle, safeguarding the autonomy of the States. Entry 34 of List II explicitly states, “Betting and gambling.” Historically and constitutionally, this has been interpreted to mean that the power to regulate, restrict, or prohibit all forms of betting and gambling rests solely with the individual States. This is why different States have varying laws on lotteries, casinos, and other forms of gaming. The enactment of the Online Gaming Act, 2025, by the Parliament directly challenges this established constitutional arrangement. By creating a uniform national ban on online money games, the Union has legislated on a matter that, in its essence, appears to be “betting and gambling.”
Judicial Doctrines: Navigating Legislative Overlaps
The Indian judiciary, particularly the Supreme Court, has developed sophisticated doctrines to interpret the entries in the Seventh Schedule and resolve disputes over legislative competence. Two such doctrines are central to the analysis of the Online Gaming Act: the Doctrine of Pith and Substance and the rule of interpretation for overlapping entries.
1. The Doctrine of Pith and Substance
The Doctrine of Pith and Substance is a legal tool used to determine the true nature and character of a legislation when it appears to touch upon a subject in a list beyond the legislature's competence. The court does not focus on the incidental effects of the law but on its essential subject matter. If the “pith and substance” of the legislation falls within one of the entries assigned to the legislature that enacted it, the law is deemed constitutionally valid, even if it incidentally encroaches upon a matter assigned to another legislature.
The genesis of this doctrine can be traced to cases like Prafulla Kumar Mukherjee v. The Bank of Commerce, Khulna & Jessore, AIR 1947 PC 60, where the Privy Council held that a State law dealing with moneylending was not invalid merely because it incidentally affected promissory notes, a Union subject. The Supreme Court of India firmly adopted this principle in the landmark case of State of Bombay v. F.N. Balsara, AIR 1951 SC 318. The Court, while examining the validity of the Bombay Prohibition Act, held that the Act's pith and substance was the regulation of intoxicating liquors (a State subject), and its incidental effect on the import of liquor (a Union subject) did not render it unconstitutional.
For the Online Gaming Act, 2025, the application of this doctrine requires an inquiry into its core essence. Is the Act fundamentally about regulating “betting and gambling,” or is it about something else that falls within the Union's domain, with its impact on gambling being merely incidental?
2. The Rule of Harmonious Construction and Specific vs. General Entries
When faced with two seemingly conflicting entries in different lists, the courts first attempt a harmonious construction, interpreting them in a way that allows both to operate without conflict. However, a crucial corollary to this principle, repeatedly affirmed by the Supreme Court, is that a specific entry must prevail over a general one. If a subject matter is covered by a specific entry in one list, it is considered to be excluded from the scope of a more general entry in another list.
In Jindal Stainless Ltd. v. State of Haryana, (2017) 12 SCC 1, the Supreme Court, while dealing with taxation entries, reiterated the well-settled principle that entries in the legislative lists must be given their widest possible amplitude, but when there is an overlap, the specific entry must be given precedence. The Court observed that if a subject is specifically provided for in the State List, it cannot be argued that it is also covered by a general entry in the Union or Concurrent List. This principle is vital, as the Union's defence of the Online Gaming Act will likely rely on general entries in the Union List to justify its legislative competence.
The Vires of the Online Gaming Act, 2025: A Two-Sided Analysis
The constitutional validity of the Act hinges on whether the Parliament can successfully argue that its “pith and substance” falls under a Union List entry, thereby overriding the specific State List entry for “Betting and gambling.”
The Argument Against the Act's Validity (State Competence)
The most direct and formidable challenge to the Act is that it is a colourable piece of legislation. A colourable legislation is one which, while pretending to be about a matter within a legislature's competence, is in reality aimed at a subject outside its domain. The argument is that the Act, despite its title and framing, is substantively a law on “gaming/ sports/ entertainment/ betting and gambling.”
Entry 33 (List II): Sports and Entertainments
Fortifying the States' exclusive domain is Entry 33 of List II, which grants them legislative power over “Theatres and dramatic performances; cinemas...; sports, entertainments and amusements.” This entry, when read alongside Entry 34, creates a comprehensive and nearimpregnable field of State competence over all aspects of gaming. While Entry 34 deals specifically with the wagering or staking component, Entry 33 covers the very activity of the game itself, whether it is considered a sport, an amusement, or a form of entertainment.
The Supreme Court, in its recent landmark judgment in State of Kerala v. Asianet Satellite Communications Ltd., has given this entry an expansive and technology-neutral interpretation. While interpreting the scope of “entertainment,” the Court held that the term must be read broadly to include “any exhibition, performance, game, sport and any other form of amusement, diversion, distraction, recreation, fun, play, good time, pass time, novelty, pleasure, enjoyment and satisfaction, etc. to which persons are ordinarily admitted on payment.”
This expansive definition is critical. Online gaming, in all its forms, squarely falls within this judicial interpretation of “entertainment,” “amusement,” and “play.” The Asianet judgment clarifies that the medium of delivery—be it a physical theatre or a digital screen—is immaterial. The essence of the activity is entertainment, a subject explicitly assigned to the States. Therefore, it can be strongly inferred from this precedent that the legislative competence to enact any law on online gaming—regulating its content, form, or accessibility—lies with the State legislature under Entry 33. When combined with the State's exclusive power over “betting and gambling” under Entry 34, it becomes evident that the Constitution has vested the States with complete legislative authority over the entire spectrum of gaming activities, whether involving real money or not.
The Act's core function is to prohibit “online money games,” which are defined based on the presence of financial stakes in expectation of winning. This is the very definition of gambling or betting. The distinction between skill and chance, which has been a subject of judicial debate, is explicitly rendered irrelevant by the Act's definition. Therefore, the law directly targets the activity of staking money on the outcome of a game, which is the essence of Entry 34 of List II.
Applying the doctrine of pith and substance, the true nature and character of the Act is the prohibition of gambling conducted through online media. The fact that it is “online” does not change the fundamental nature of the activity. The medium is incidental; the subject matter is gambling. Furthermore, applying the specific vs. general rule, Entry 34 of List II is an explicit and specific entry dealing with “Betting and gambling.” Any attempt by the Union to justify the Act under a more general entry would violate this established interpretive principle.
The Potential Defence of the Act (Union Competence)
The Union Government will likely defend the Act's constitutionality by arguing that its pith and substance does not lie in “betting and gambling” but in other subjects that fall squarely within the Union's legislative purview. The potential arguments are:
- National Security, Public Order, and Financial Integrity: The usual overarching defence taken by the Parliament is that the unregulated proliferation of online money games poses a direct threat to matters of national importance that transcend State boundaries. The Union may argue that these platforms are being used for large-scale money laundering and terror financing, thereby impacting the sovereignty and security of India (a Union subject). Furthermore, while ‘public order' and ‘public health' are State subjects, the Union could contend that the widespread addiction and financial ruin caused by these games have created a national public health crisis and a breakdown of public order that individual states are ill-equipped to handle. In this view, the Act is not merely about regulating ‘entertainment' or ‘gambling' but is a necessary measure to protect the nation's economic stability and security, justifying parliamentary intervention.
- Regulation of Communication (Entry 31, List I): This entry grants the Parliament power over “Posts and telegraphs; telephones, wireless, broadcasting and other like forms of communication.” The argument would be that online gaming is a form of digital communication that occurs over the internet. The Act, therefore, is not regulating the game itself but the medium through which it is conducted. The Union could contend that in an era of borderless digital communication, only a central authority can effectively regulate activities on the internet to prevent societal harm.
- Inter-State Trade and Commerce (Entry 42, List I): Online gaming is inherently an inter-state activity. A player in Maharashtra can access a server in Karnataka, with payments processed through a gateway in Delhi. This constitutes a complex web of interstate trade and commerce. The Union could argue that the Act is necessary to regulate this commercial activity, which transcends State boundaries and cannot be effectively managed by individual States.
- Residuary Powers (Article 248 and Entry 97, List I): The Parliament has the exclusive power to legislate on any matter not enumerated in the State or Concurrent Lists. The Union might argue that “online gaming” is a sui generis (unique) subject that was not contemplated by the Constitution's framers. They could contend that Entry 34 of List II, “Betting and gambling,” was intended to cover only traditional, physical forms of these activities. Therefore, online gaming, being a novel technological phenomenon, falls into the residuary domain of the Parliament.
- Information Technology and Intermediaries (IT Act, 2000): The Union has already occupied the field of regulating online content and intermediaries through the Information Technology Act, 2000. The new Act itself leverages the IT Act for blocking noncompliant platforms. The argument could be that the Online Gaming Act is an extension of the Parliament's established power to govern the digital ecosystem of India.
Weighing the Arguments and the Likely Judicial Outcome
While the Union's arguments are plausible in the context of a modern digital economy, they face significant constitutional hurdles when subjected to rigorous judicial scrutiny. The Supreme Court has consistently held that the legislature cannot regulate a subject outside its competence merely by focusing on the modern medium used for it.
The “inter-state trade and commerce” argument is more substantial, given the borderless nature of online gaming. However, even here, the pith and substance of the Act is not the regulation of trade logistics or commercial flow, but the prohibition of a specific activity deemed harmful, which is gaming and gambling. The commercial aspect is secondary to the primary subject matter.
In light of the Asianet judgment, it is difficult to argue that “online gaming” or “online entertainment” is fundamentally different from “entertainment” or “gambling”. The nature of the act remains the same, regardless of the platform. The Supreme Court is likely to view “online” as merely a technological qualifier for the same activities described comprehensively in Entries 33 and 34 of List II.
Therefore, when the judiciary applies the established doctrines, a strong conclusion emerges. The pith and substance of the Online Gaming Act, 2025, is unequivocally the regulation and prohibition of “gaming and entertainment” and “betting and gambling.” This subject is specifically and exclusively assigned to the States under Entry 33 and 34 of List II. The Act appears to be a direct and substantial encroachment on the legislative field of the States.
Conclusion
The Promotion and Regulation of Online Gaming Act, 2025, represents a classic constitutional conflict between a well-intentioned legislative measure and the rigid demarcations of a federal structure. While the need to regulate the harms of online money gaming is undeniable, the path chosen by the Parliament raises grave questions about its legislative competence.
An application of the doctrines of pith and substance and harmonious construction, as laid down by the Supreme Court, leads to the compelling conclusion that the Act is ultra vires the Parliament. The combined reading of Entry 33 (“sports, entertainments, amusements”) and Entry 34 (“Betting and gambling”) of the State List creates a comprehensive legislative field reserved for the States. The Supreme Court's recent expansive interpretation of “entertainment” in the Asianet case further solidifies this position. By enacting a national law that governs these very subjects, the Parliament has legislated on a State subject, thereby disrupting the constitutional balance of power.
The Act is almost certain to face a barrage of legal challenges, and its ultimate fate will be decided by the Supreme Court. The Court will be tasked with the delicate act of balancing the need for uniform regulation in a borderless digital world against the foundational principles of Indian federalism. While the Court may acknowledge the challenges of regulating online activities, it should not overlook a clear and substantial encroachment on the legislative domain of the States. The Online Gaming Act, 2025, in its current form, stands on a constitutionally precarious ground, and its journey through the judicial system will be a defining moment for the future of federalism and digital regulation in India.
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