Midnight curfew and more: Tamil Nadu’s online gaming regulations have companies racing for clarity, alternatives

Tamil Nadu’s new regulations for real money games have sent ripples across the ecosystem, sending companies and players alike scrambling for answers. 

On February 10, the Tamil Nadu Online Gaming Authority (TNOGA) rolled out rules, which according to industry experts are reasonable and already in practice. However, two of the two rules have triggered concerns—a “gaming curfew” and Aadhar authentication. 

The curfew, which mimics the blank hours set forth by China in 2023, mandates a gaming blackout between 12 AM to 5 AM IST in Tamil Nadu, interrupting both players and the platform’s revenues. 

Notably, when China introduced its set of rules two years ago, it had wiped billions in market value of gaming giants like Tencent and NetEase.

Meanwhile, the Aadhar authentication, which requires a second layer OTP verification sent to the Aadhar-linked phone number, has sparked confusion as private companies, legally, cannot enforce it. 

According to industry experts YourStory spoke to for this story, TNOGA has since agreed to look into the matter. They added that internal discussions are ongoing on exploring other means of authentication and edits to the blackout rule including shortening the curfew or even shifting the time slots. 

The gaming community, meanwhile, is appreciating other rules including spending limits, warning messages, and age restrictions which prevent minors from participating in online real money games (RMG). 

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Rules or roadblocks?

Under the Aadhar Act, 2016 private entities can apply for using the data infrastructure to “promote the ease of living of residents”. This is in contrast to Unique Identity Authority of India’s earlier stance which prohibited such access. 

However, not all entities can access Aadhar data. 

“Some of the bigger (RMG) companies might find a solution to do Aadhaar verification. But, for a lot of smaller companies, for every verification, etc, they would have to pay money. That would make it even more unsustainable, which the industry is anyway, after GST,” an industry expert told YourStory, on the condition of anonymity. 

RMG companies have reached out to TNOGA for clarification.

“We've made TNOGA aware that this (Aadhar authentication) is something that even if we want to, we cannot comply with. Now as of the beginning of February, there has been a change in the central government regulations and they have started allowing certain private companies to ping the Aadhaar database. However it's not open for all,” a second industry expert noted, also requesting anonymity. 

They added that if a particular private company or a sector has a requirement to authenticate users using the Aadhaar database then the nodal ministry for that sector will have to create a case for that and then have to seek permission from UIDAI. “It's therefore a very lengthy process for that to happen.”

According to the second industry source cited above, during the meetings held with the authority after the regulations were published, TNOGA mentioned that it would allow companies to establish a two-factor authentication by means other than Aadhar.

There are two ways this issue can be resolved, according to Vidushpat Singhania, Managing Partner at sports law firm Krida Legal. One, the central government opens up the usage of Aadhar data to all private entities or two, they do not allow it and companies can challenge this regulation. 

“If the government says, ‘okay, fine, we are going to open up the Aadhaar verification for online gaming or other key companies’, then it fades away because the challenge then becomes that the government is allowing you. It's just a technical aspect that you need to take care of and build it in. But if the government itself says, ‘no, we will not allow it’, then how do you do this? At one point, you are imposing that obligation on a player, but at the other end, you're not giving them the ability to do the same thing,” says Singhania. 

The curfew conundrum

TNOGA’s rules have set up a curfew between midnight and 5 AM for players logging in from Tamil Nadu but the rule offers no clarity, according to the industry players. 

Moreover, platforms that operate rummy games—a game that has been culturally rooted in southern states and see much of its user base from these regions—have retaliated to this bracket. 

“If the argument is that this rule is to reduce addiction, it is not like someone who's playing this can't go and play other games or can't do other stuff on offshore websites,” notes the first industry expert. 

Rummy competitions are often held between 12 AM and 2 AM, which is a high revenue time bracket for these platforms. Shutting out players from the state during this time will also affect player liquidity. 

“If a platform has about 50,000 players playing at 12 AM and suddenly 10,000 players become inactive then what happens is it takes the platform longer to fill up the other tables. So players have to wait longer for the games to start. There is a general player liquidity crunch that happens in peer-to-peer format,” the second source added. Peer-to-peer games include rummy, poker, and Ludo, among others. 

Another problem is understanding how to implement these blank hours. Geo-fencing is one option but according to companies, VPN can easily bypass geofencing. 

The industry is also confused about the steps that they would need to take to deploy the curfew, seeking clarity on the curfew, such as do the platform kicks off a player who is in the middle of a round? If yes, how can the player not lose money in the process? How about players from the state who are currently playing the same from another state? 

All these changes would require significant technological changes. 

“The technological challenge is actually immense. And I don't know who is advising the TNOGA, but apparently they have been advised that these changes will not take more than a few days or a couple of weeks to make,” said one of the sources. 

Per the rules set forth currently, companies would need to segregate Tamil Nadu players and provide them with a different tech stack that should also be synced together and assimilated with other players from the country. “We need to create a separate workflow for Tamil Nadu users versus the rest of India,” they said. 

Another source said, “In very simple terms, what these rules do is that they require companies to make a separate app for the users in Tamil Nadu. And while that's a bit of an exaggeration, technically a user from Tamil Nadu will have a completely separate user experience.” 

Curbing addiction or business?

Gaming addiction is a real threat and the companies in the sector are aware of its implications. Most companies have already implemented steps to flag concerns regarding overspending on these platforms, rising usage and warnings for when a user displays concerning spending behaviours while playing. 

The industry experts YourStory spoke to add that companies have psychologists that often reach out to certain users and help is offered if at all they require it. Users, who are concerned about the amount of time or money they spend have options to reach out to these psychologists

Vikram ‘Lungi’ Kumar, a pro poker player, said, “Addiction is a serious issue, but these rules don’t address it effectively. Professional players already practice discipline, bankroll management, and responsible gaming habits—this is their career, not an impulse.”

The right approach would be targeted awareness programmes, the right tools and responsibilities gaming policies. “Restricting access without tackling root causes like financial literacy and mental health support will only push players underground rather than addressing addiction meaningfully,” Kumar added.

The eGamers and Players Welfare Association (EPWA) along with a few professional gamers from the state has challenged the regulations, citing infringements to the fundamental rights of online gamers. 

On the other hand, Roland Landers, CEO of AIGF (All India Gaming Federation) adds that these rules offer a competitive advantage to offshore illegal gambling platforms. “We do believe that certain aspects of the latest amendments, such as the blackout period, will have unintended consequences and will be counterproductive to user safety. These restrictions will push certain users towards offshore illegal gambling platforms, which pose significant risks to consumer safety and impact national and economic security,” he said in a statement. 

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The step forward

All industry experts YourStory spoke to have agreed that the rules represent an important starting point for a central regulatory framework that if brought forward, will benefit the segment. 

According to a third industry player, also citing anonymity, much of the advocacy prior to these rules was around spending limits. The new regulations were able to come up with a solution with variable spending limits across games. 

TNOGA’s primary intent is to target the smaller players who have not implemented these rules on their platform. “I think within a month or so you will see a lot of compliance to most of the rules because the majority of the rules are rules we ourselves have been discussing. It would be good to implement these rules in any state, not just Tamil Nadu. I think companies, at least within AIGF, or any other charter, will begin implementing it if they have not already,” the third industry source said.

According to the industry source, there are ongoing discussions about the curfew which includes cutting the hours short or even shifting the timings. 

While many companies are now in a wait-and-watch mode, according to reports A23’s parent firm Head Digital Works, Games 24x7, and Junglee Games have filed a writ petition in the Madras High Court seeking an injunction on the enforced rules.