Supreme Court Upholds States’ Power to Ban Online Games

The Supreme Court of India observed that state governments have the authority to ban or regulate online games, including skill-based games, if they adversely affect public life or create social problems. A bench comprising Justices JB Pardiwala and R Mahadevan upheld restrictions imposed by the Tamil Nadu and Karnataka governments on online gaming platforms. The court clarified that while skill-based commercial games enjoy constitutional protection, such protection would not apply if the games are used for betting or wagering activities unless specifically exempted by law.

In another significant ruling, the Supreme Court upheld the constitutional validity of the retrospective 28% GST imposed on online gaming companies. The court stated that fantasy sports and pool stake-based gaming activities fall under the CGST Act, 2017. Petitions filed by companies including Delta Corp and Gameskraft Technologies challenging the retrospective tax were dismissed. The apex court also vacated the stay on proceedings related to nearly ₹1.12 lakh crore GST show-cause notices issued by the Directorate General of GST Intelligence and set aside the Karnataka High Court order quashing a ₹21,000 crore notice issued to Gameskraft.