Earlier this month, the Madras High Court dealt a blow to online gaming companies by upholding regulations laid down by the Tamil Nadu government for gaming platforms operating in the state. The ruling adds to the growing list of challenges faced by online gaming companies, which must now contend with perception battles, tightening regulations, potentially crippling tax liabilities and, in some cases, existential threats.A host of gaming companies had approached the court, seeking to have the state’s rules struck down. The court, however, upheld the state’s right to impose stricter rules, including enhanced ‘Know Your Customer’ norms, age restrictions, and caps on the amount of real money that can be played with. Gaming companies view these restrictions as barriers to acquiring and retaining users. However, the development once again underscores the pressing need for regulatory clarity in the sector.
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