Why did Supreme Court back curbs on online gaming? | Explained

T he Supreme Court on May 27, 2026, delivered two rulings with major ramifications for the country’s real-money gaming industry. A Bench of Justices J.B. Pardiwala and R. Mahadevan upheld the constitutional validity of the Centre’s retrospective 28% GST levy on online gaming companies and, in a separate judgment, affirmed the validity of State laws prohibiting real-money gaming platforms. What did the Court have to decide? The judgments arose from two distinct sets of appeals concerning the regulation and taxation of online gaming platforms. The first batch related to State laws prohibiting online betting and wagering. In 2021, Tamil Nadu and Karnataka enacted legislation criminalising betting on games played in cyberspace and prescribing penalties, including imprisonment. After the Madras and Karnataka High Courts struck down these enactments, the respective State governments approached the Supreme Court, arguing that betting and gambling fall within their legislative competence under Entry 34 of List II of the Seventh Schedule. They further contended that the restrictions were necessary to address addiction and other social harms associated with online betting.