The Telangana state government told the Hyderabad High Court on Monday, that it had decided to ban online gambling, after it received many complaints over the issue.
The state also claimed that it has the power to regularise or prohibit the playing of rummy offline and online, by treating it as an offence.
The court was hearing a petition filed by several companies from across the country, who had moved it, after challenging an ordinance issued by the state.
Last month, the state cabinet approved an ordinance, that made online gamblers and promoters of these games, liable for prosecution under a new law.
The ordinance proposed to amend the Gaming Act to include and ban online gambling.
"Soon after the formation of Telangana, the CM had ordered police to crack down on clubs and other places which encourage gambling. But the government received complaints that people are now indulging in online gambling. We want to eliminate gambling in all forms. So the Gaming Act would be amended, banning online gambling. The cyber police will track online gambling and act against violators," Deputy Chief Minister Kadiam Srihari had said.
Reports suggest that the state planned to impose a fine of Rs 5,000 for the first offence and higher fines for repeat offenders.
While online gambling is punishable under Indian law, the legal defence often is that poker and rummy were games of 'skill', and did not rely entirely on chance and luck.
While the companies made the same argument in the HC on Monday, Telangana argued that it had also received complaints of people committing suicides after incurring huge losses in the game.
The case will come up for hearing again on Tuesday.