When Skill Meets Stakes: Reassessing Online Gaming After Junglee Games

Introduction : Indian gaming jurisprudence has long revolved around a seemingly simple distinction: games of skill and games of chance. This dichotomy has dictated whether an activity could be deemed gambling and, subsequently, whether it could be restricted by the State. Judicial decisions concerning rummy, horse racing and prize competitions have consistently emphasised the extent to which the outcome of an activity is determined by skill as opposed to chance. Over time, the distinction acquired particular relevance in Indian gaming law, as activities involving a substantial degree of skill were distinguished from activities predominantly dependent on chance.

Online gaming introduced significant complexity to this relatively straightforward paradigm. Activities traditionally played in physical spaces were now facilitated through digital mediums with the capacity to simultaneously entertain millions of users. The online medium allowed for rummy, poker and other competitive games to be played not only outside of clubs but also on a vastly expanded scale and with an equally extensive reach. Users could deposit money, participate in contests and win or lose money depending on the outcome of a game, all through their smartphones. The commercial ecosystem surrounding the game also became far more sophisticated. Gaming companies argued that the medium through which a game was played could not alter its core character. If rummy or another activity was a game of skill in a physical space, its availability through online platforms ought not transform it into gambling.

It was in this context that the Supreme Court delivered its landmark judgment in the State of Tamil Nadu & Ors. v. Junglee Games India Pvt. Ltd. & Ors. The judgment is significant not because it abandons the traditional distinction between skill and chance, but because it introduces a novel constitutional dimension to the financial transaction surrounding the game. The reasoning of the Court suggests that the fact that a game involves skill does not necessarily determine that the activity of staking money on its uncertain outcome can be regulated as betting. In effect, the judgment potentially shifts the focus of Indian gaming law from the question of what kind of game is being played, to the equally vital question of how the game is being played.

The Supreme Court’s judgement therefore raises a fundamental question concerning the future of online gaming regulation in India. Can a game continue to be a game of skill while the transaction facilitating its play be treated as betting? The answer to this question by the Supreme Court will have far-reaching implications not only for online gaming companies but also for the constitutional law of betting, gambling and commercial activity.

The Background of the Dispute

The litigation involved legislative interventions by the States of Tamil Nadu and Karnataka to regulate certain activities of online gaming, particularly where such games were played for money or other stakes. The legislative measures were challenged by several online gaming companies including Junglee Games, who argued that the laws failed to recognize the constitutionally significant distinction between games of skill and games of chance.

The challengers relied upon Indian jurisprudence concerning the nature of gaming activities. In State of Bombay v. R.M.D. Chamarbaugwala, the Supreme Court recognized a distinction between competitions involving substantial skill and those that were predominantly dependent on chance. This distinction was subsequently elaborated in State of Andhra Pradesh v. K. Satyanarayana, where the Court acknowledged that rummy is not purely a game of chance and involves a significant element of skill. The same position was reaffirmed in Dr. K.R. Lakshmanan v. State of Tamil Nadu, where horse racing was recognized as an activity involving substantial skill as opposed to being a mere game of chance.

Relying upon this jurisprudence, online gaming companies argued that a game involving a predominance of skill could not be deemed gambling merely because it was played in an online space or because participants paid to be part of the contest. The logic of the argument was that the intrinsic character of the game could not be altered by the fact that it was being played through an online medium or that a participant paid to play it.

The High Courts entertaining challenges from online gaming companies had largely agreed with this position. The Madras High Court had observed that the State could not treat a game involving a predominance of skill as gambling merely because such a game was played online or involved stakes. Similar apprehensions were expressed in the litigation concerning the amendments brought about in Karnataka. The States consequently approached the Supreme Court, raising a constitutional question concerning the extent to which State legislatures could regulate betting and gambling activities through online mediums.

The Constitutional Question Before the Supreme Court

Central to the litigation was Entry 34 of List II of the Seventh Schedule to the Constitution which granted State legislatures the power to legislate with respect to “betting and gambling.” One of the questions before the Supreme Court was whether the expression “betting and gambling” could extend to betting on the outcome of a game of skill, or if the constitutional entry was exclusively restricted to games of chance.

The distinction was significant since it would determine the extent to which State legislatures could regulate online gaming activities involving stakes. If a game of skill was entirely outside the scope of betting and gambling, the extent of the legislative power of the State would be significantly limited. If betting and gambling could potentially be separated as distinct activities, the scope of the legislative competence of the State would be far broader.

The gaming companies argued that the distinction between games of skill and games of chance must continue to form the foundation of constitutional analysis. According to their position, if a game of skill was established, the State could not incorporate it within the ambit of Entry 34 merely because participants staked money on the outcome.

The States, on the other hand, adopted a broader interpretation of the constitutional entry. According to their position, betting was not necessarily synonymous with gambling and the act of staking on an uncertain outcome could constitute a separate activity, regardless of whether the game itself involved skill or chance. It is this broader interpretation of the constitutional provision that ultimately informed the reasoning of the Supreme Court.

The Supreme Court’s Reasoning

The Supreme Court examined the constitutional entry with reference to the principle that entries in lists must be read in a broad manner. The Court analysed the expression “betting and gambling” and rejected the proposition that the concept of betting should be restricted to games of chance.

A crucial distinction was drawn by the Court between the nature of the game and the nature of the transaction surrounding the game. An activity may involve a substantial degree of skill, but that fact alone may not determine the character of a separate transaction involving a stake on the uncertain outcome of the game.

This distinction is even more apparent when considering activities outside the realm of online gaming. Chess can unquestionably be deemed a game involving skill, strategy and experience. Nevertheless, the outcome of a game of chess is uncertain prior to its being played. If a spectator who is not participating in the match places money on the outcome of the match, the transaction can be regarded as betting, despite the skill that is involved in the game. The presence of skill in the activity does not automatically determine the nature of the separate transaction involving a stake on its outcome.

The Supreme Court’s reasoning essentially separates two discrete inquiries which have regularly formed the basis of judicial analysis in this area of law. The first concerns whether an activity is predominantly one of skill or chance and the second concerns whether money is being staked on an uncertain outcome of an event. According to the reasoning of the Court, the former inquiry does not automatically determine the latter.

The Court’s judgment therefore does not suggest that games of skill are gambling. Such a conclusion would be inconsistent with the jurisprudence of the Court as well as that of other Indian courts. Rather, the Court’s reasoning recognises that betting can exist as a separate activity, even where the underlying event or game involves skill. As a consequence, the nature of the transaction may bring it within the purview of Entry 34.

The Continuing Relevance of the Skill-Chance Distinction

The significance of the judgment in Junglee Games lies precisely in the fact that it does not render the traditional doctrine of skill-chance distinction irrelevant. The nature of the underlying game continues to be a significant factor. A game that involves a predominance of skill does not suddenly convert itself into a game of chance merely because a participant is required to pay to be part of the contest.

What the judgment challenges is the notion that identification of a game as one of skill automatically excludes its regulation as betting and gambling from the ambit of the State’s legislative competence. A distinction must be drawn between participating in a game of skill and staking money on the uncertain outcome of such a game. Although the two activities may overlap, they are not necessarily identical in law.

This distinction is especially relevant when examining the phenomenon of modern online gaming platforms. The traditional cases involving rummy and horse racing were decided in a distinctly different commercial and technological environment. Online platforms today can enable deposits, hold contests, accumulate participants, determine winners and even deduct commissions, all simultaneously and through a digital medium. The nature of the economic transaction involved in such platforms is significantly more complex than simply identifying whether the underlying game involves skill or chance.

The Court’s reasoning therefore brings in a new dimension to the analysis of gaming activities. The focus is no longer only on the mechanics of the game but also on the economic structure within which the game is being facilitated. This may well be one of the most significant doctrinal consequences of the Supreme Court’s judgment.

Entry Fees, Stakes and the Substance of the Transaction

Perhaps one of the most fascinating aspects of the judgment is the question of whether an entry fee into a contest can constitute betting. This issue will increasingly become relevant if the nature of the financial transaction involving participation in an activity is to be examined alongside the nature of the game.

Not every payment that is made in relation to a competitive activity can be deemed a bet. Users regularly pay registration or entry fees to participate in sporting activities, chess tournaments, e-sports and other competitive games. The fact that there is uncertainty over the result of a game does not automatically render a payment of this nature a bet. In every competitive activity, there is an element of uncertainty and a prize or reward that can potentially be claimed by the winner.

The true distinction must therefore be drawn based on the nature and object of the payment itself. An entry fee usually constitutes consideration for being part of an organised competition and may be utilised for organising or facilitating the competition. A stake, on the other hand, is much more directly exposed to the risk of loss depending on the uncertain outcome of an event.

The problem with online gaming platforms is that they frequently combine elements of both. A user may pay a certain amount to participate in a contest where a proportion of the amount paid can be claimed as a prize. The platform may utilise a proportion of the amount for its own services and commission and the remainder may be pooled together with similar payments across multiple participants to form prize money.

Identifying the legal nature of such a payment will require more than a mere examination of the labels attached by the parties to the transaction. Referring to a payment as an entry fee will not automatically determine its legal nature, just as the fact that a sum is paid prior to participating in an activity will not automatically mean that it constitutes a stake.

It is therefore necessary to analyse the economic substance of the transaction. How is the sum collected, pooled, distributed or at risk of being lost depending on the uncertain outcome of the game? This is precisely where Junglee Games has the potential to have the most significant commercial impact.

Online gaming companies will increasingly have to defend not only the nature of the game but also potentially the financial structure within which the game operates in order to avoid being brought within the ambit of Entry 34.

The Digital Dimension of the Judgment

The reasoning of the Supreme Court should also be examined in the context of the digital environment in which online gaming takes place. Online gaming differs from traditional forms of gaming in terms of its reach and convenience. A digital platform can potentially be available to users 24x7 and allow them to participate in a game at almost any given point in time and from virtually any location.

This has significant implications for the nature of the concerns raised by the State. A physical venue involves certain geographical and logistical limitations. An online platform eliminates most of these barriers and enables repeated participation with minimal effort. The inclusion of digital payment systems enables seamless deposits and withdrawals of sums of money.

The States were concerned with issues relating to financial loss, addiction and other social problems associated with online gaming involving stakes. The Supreme Court carefully examined these regulatory concerns when analysing the legislative measures brought about by the States.

The significance of this aspect of the judgment lies in the fact that it recognises that such issues of concern cannot be ignored solely on the ground that an activity takes place in a digital space. The same underlying game may be played in entirely different environments. A game that is occasionally played in a physical space may not raise the same regulatory concerns as one that is consistently accessible through an online platform.

This does not mean that the mere online nature of an activity automatically alters its legal character. However, it does mean that the State can legitimately take into account the unique risks associated with online mediums while determining whether an activity falls within the ambit of Entry 34.

From a Game-Centric Approach to a Transaction-Centric Approach

The most significant consequence of Junglee Games in broader constitutional law terms is its potential to shift the focus from a game-centric approach to a transaction-centric approach.

Under the traditional framework of Indian gaming law, the focal point of any litigation was usually the intrinsic nature of the game. Courts would examine whether rummy, poker or another activity involved a predominance of skill or chance. Once this determination was made, it would frequently form the basis of the resolution of the dispute.

The approach adopted by the Supreme Court in Junglee Games requires that an additional inquiry be made. The Court will now have to examine not only what is being played but also what exactly is happening when money enters the transaction. Is the participant merely paying to be part of the game or is money being staked on an uncertain outcome? Does the participant stand to lose the amount depending on the result? How are the amounts that are paid by participants distributed and what is the role that is being played by the platform?

These are questions that shift the focus from the game to the transaction surrounding the game.

This approach may well be better suited to the realities of the modern platform economy. Online gaming companies do not merely facilitate traditional games in a digital space. They involve users in a far more sophisticated commercial ecosystem that involves not only the games themselves but also payment systems, digital wallets, prize structures and a host of other considerations. The economic structure of the platform may be as relevant as the mechanics of the game.

The Court’s reasoning can therefore be viewed as an attempt to apply traditional constitutional concepts to a modern digital economy.

The Risk of an Overbroad Interpretation

Despite the practical reasoning of the judgment, the approach adopted by the Supreme Court does have the potential to trigger an important doctrinal challenge. If the concept of betting is interpreted too broadly, it can potentially extend beyond the activities that the law traditionally associates with wagering or gambling.

Almost every competitive activity involves an element of uncertainty. Sports tournaments do not guarantee that a participant will emerge victorious. Professional gamers compete for prize money without any certainty of winning. Even chess players potentially pay to participate in competitions where the reward depends entirely on their performance in the game.

The mere presence of payment, uncertainty and a reward cannot be sufficient to constitute betting. If this were the case, almost every competitive and commercial activity would potentially be brought within the ambit of Entry 34.

The true test must be the nature of the relationship between payment and risk. If the payment that is made by a participant is not exposed to the risk of loss depending on the uncertain outcome of an event, it cannot constitute betting. It may simply be a question of consideration for being part of an organised competition.

Conversely, if the economic structure of a transaction involves pooling of money and exposing it to the risk of loss depending on an uncertain outcome, it may constitute betting. However, establishing this distinction will not always be easy since online gaming platforms can potentially adopt increasingly sophisticated structures to facilitate such transactions.

In this sense, Junglee Games may be more significant for the questions that it raises rather than the questions that it answers.

The Impact on the Online Gaming Industry

The judgment will have significant implications for the business models of online gaming companies. Prior to this judgment, the predominant legal strategy of such companies was to establish that an underlying game involved a substantial degree of skill. Demonstrating this position was regarded as crucial to resisting arguments that the activity was gambling or that it ought to be regulated as such.

Post-Junglee Games, this argument may no longer be sufficient. A company may establish that its game involves skill and still find itself facing a separate inquiry into the nature of the financial transaction that facilitates its play.

The economic model of an online gaming platform will therefore increasingly be examined. The way users deposit money, enter contests, compete for prizes and receive winnings may be examined to determine whether it constitutes betting.

The distinction between a game and a bet will therefore become increasingly relevant as companies attempt to distinguish their platforms from activities that involve a stake on an uncertain outcome.

In this sense, Junglee Games is likely to be far more significant for the questions that it raises rather than the ones that it resolves. Similarly, the involvement of the platform in collecting funds, facilitating the transactions and retaining commission may face heightened regulatory scrutiny.

This does not mean that all real money gaming platforms are banned or that every skill based game involving money is betting. The judgement reflects that the legal assessment will need to take a more nuanced approach.

The future regulation environment will compel gaming companies to pay more attention to the design of their financial structures. Compliance may increasingly require proving not only that the underlying game is a skill but also that the overall transaction does not amount to a legally prohibited or regulated form of betting.

Conclusion

State of Tamil Nadu v. Junglee Games India Pvt. Ltd. marks an important milestone in the development of Indian gaming law. Its most important contribution, however, comes in distinguishing the nature of a game from the nature of the financial transaction that accompanies the game.

The traditional dichotomy between games of skill and games of chance is not entirely gone. The classification of a game still carries legal weight and what Junglee Games shows is that simply classifying a game as one of skill might not end the constitutional inquiry when money is staked on an uncertain outcome.

The question for courts and regulators may increasingly focus on the purpose of the payment, the nature of the financial risk and the economics structure through which participants compete.

This marks a potentially significant change in Indian gaming jurisprudence. The law may be moving away from looking at the game in isolation and towards examining the transaction that surrounds it.

At the same time, the success of such an approach will depend on distinguishing between legitimate skill based competitions and genuine wagering transactions. If the concept of betting is broadened without sufficient doctrinal boundaries, ordinary sporting competitions, e-sports tournaments and other activities involving participation fees and prizes may face unnecessary legal uncertainty.

The future development of Indian gaming law will require courts and regulators to develop a more refined understanding of what separates participation from wagering. The distinction between skill and chance will continue to matter, but after Junglee Games, it may not be the only question that matters. The more consequential question may be what happens when skill meets stakes.

Author: Tarkik Sai M in case of any queries please contact/write back to us via email to content@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney

References

1. State of Tamil Nadu & Ors. v. Junglee Games India Pvt. Ltd. & Ors., 2026 INSC 594, Supreme Court of India, decided on 27 May 2026.

2. State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699.

3. R.M.D. Chamarbaugwala v. Union of India, AIR 1957 SC 628.

4. State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825.

5. Dr. K.R. Lakshmanan v. State of Tamil Nadu, (1996) 2 SCC 226.

6. The Constitution of India, 1950, Article 19(1)(g).

7. The Constitution of India, 1950, Seventh Schedule, List II, Entry 34.

8. Tamil Nadu Prohibition of Online Gambling and Regulation of Online Games Act, 2022.

9. Karnataka Police Act, 1963, as amended by the Karnataka Police (Amendment) Act, 2021.

10. Supreme Court of India, State of Tamil Nadu & Ors. v. Junglee Games India Pvt. Ltd. & Ors., 2026 INSC 594.

11. LiveLaw, “No Constitutional Protection For Betting On Games Of Skill: Supreme Court Upholds TN, Karnataka Laws Banning Online Games With Stakes,” 2026.