India rummy ruling delayed again, dealing blow for games of skill

A key Supreme Court hearing that may finally set the framework for legal gambling on games of skill in India has been delayed once again. 
The court was to hear whether the game of rummy, online or offline, could be played for profit on January 14th, but that has now been pushed back again to April 29th.
The case is seen as key in establishing the legality of the business models of several rummy websites and offline clubs and by extension will affect all games of skill where stakes are involved. It may unlock a potentially huge market for the industry in India, where casino gambling is banned, and provide an interesting reference point for other jurisdictions in Asia, where games of skill are popular.
“The potential of skill games is undoubted and the outcome of the judicial process will make it more favorable for all the key players who are already in the market. They will have an advantage of user base and rapidly growing business,” said Parikshit Madishetty, managing director, Grid Logic Software.
Rummy was originally ruled to be a game of skill and therefore outside of the scope of banned gambling activities by a 1968 Supreme Court verdict.
The position was further strengthened by a 1996 decision of the apex court which also held that betting on horse races was a game involving substantial skill. In the past four decades several decisions of High Courts around the country also decreed that rummy played with or without stakes was not illegal.
However in 2012, a two-judge bench of the Madras High Court threw a spanner in the works and held that playing rummy in clubs for profit, gain or stakes was illegal as per the Madras Police Act.
The rummy club in question, Mahalakshmi Cultural Association, chose to appeal to the Supreme Court, with some online rummy companies/offline clubs also intervening.
The question before the Supreme Court is whether online and offline rummy can be played for stakes or profit since it is a game of skill and whether commission can be charged for the game by operators.
Even after the case is heard, experts aren’t expecting a fast ruling.
“After the Supreme Court clarifies the legal position on online rummy, the Delhi High Court may decide on the legality of online poker. Based on these decisions, there would be some certainty for those involved in the skill games business. Though it is difficult to give timelines for such a decision, it is expected that the entire process may take a couple of years from now,” said Jay Sayta, founder, Glaws.in, a website that monitors gambling legislation in India.
Poker in India is an even more grey area, as it has not been conclusively decided by Indian courts as to whether or not it is a game of skill. The state of West Bengal has decided it can be classified as such, while the High Court of Karnataka has also made observations.
Litigation is pending in the Delhi High Court on whether online poker for stakes where rake is charged is legal, and the first real verdict on the legality of poker is only expected after the Supreme Court decides the question of rummy for stakes and online rummy models.
“The legality of 13-card rummy will make it easier for online poker as well, however the final decision will impact all of the skill games businesses,” Madishetty said.
With many countries around Asia banning locals from gambling in casinos, or games of chance in general, the position of games of skill for cash raises interesting questions.
Mahjong, which has its origins in China, is the world’s most played game, with 700 million players worldwide, mostly in Asia, while poker is also gaining in popularity.
Mahjong boasts 500 million players in China alone, where the game is recognized by the General Administration of Sport as the country’s 255th sport, with 20,000 registered parlors and countless unregistered ones.
The average player is Asian, male, 29 years old, while the average playing time per hand is 3 minutes 20 seconds. In Hong Kong, Singapore, Malaysia and Taiwan, it is recognized as the number one form of family entertainment.
There are also real money versions of the game that are gaining in popularity. Mahjong Logic for instance offers an online mahjong for cash game and says its subscriber base is growing by 10 percent a month, with the largest audience currently in Japan. The company’s player value is roughly $700 per player, which is very high, and at least double that of poker. The company also notes it has a Rummy version of its software in the pipeline to be licensed to India operators once legalization is in place.
However, most operators in Asia work on a play for points or subscription model.
According to PokerStars the market for poker around the region is also fast gaining in popularity.
PokerStars LIVE is represented in Asia Pacific through the Asia Pacific Poker Tour (APPT) and now two LIVE Poker Rooms at the City of Dreams Macau and City of Dreams Manila.
Cash prizes are all controlled by APPT in Macau, Philippines and Korea and are permitted, while cash poker games are permitted at events in these countries.
Since 2007, APPT events have been held in Macau, Manila, Cebu, Seoul, Beijing and throughout Australia and New Zealand. The company says for its average priced live poker tournaments in Macau, players from Mainland China have gradually grown over the past three years to form the largest percentage, comprising about forty percent of the total.
Japan and Hong Kong are at around ten percent, while Russia and India have also been increasing in numbers in recent times. The first ever poker tournament in China was the APPT Macau in November 2007, while the largest tournament by player number outside of the USA at the time was the Beijing Millions in July 2014 with 2,732 participants.
Cash poker games are not permitted at Chinese venues and tournament entries and payouts in Beijing were handled by the venue, with APPT providing logistical support.
PokerStars LIVE opened its first room in Macau in 2008. Currently located at the City of Dreams, it is the largest permanent poker room in Asia expanding to over 40 tables for live poker events.
The company also recently opened a 14 table permanent room on the second level of the Melco Crown Entertainment’s new City of Dreams Manila resort. Like Macau, PokerStars LIVE Manila will host both daily and special tournaments and round the clock cash game action.
It seems as though the future of skill games in Asia could be bright.