Its a minhug (Mekor Chaim of the Chavas Yair OH:155, Chidushei HaRim in the name of Rav Yonason Eyebushitz ZT”L, quoted in Siach Sarfei Kodesh I:522, and Rav Yaakov Emden ZT”L in Sefer Hisavkus) many Yidden have not to learn Torah on kratsmich (either Dec. 25, or the Orthodox Jan. 6).
It is brought down in the Otzar Minhagei Chasidim that the reason is the xtians would start lynch mobs against the Yidden. Another reasons given (Kovetz Michtavim [Chasam Sofer] bsheim Rav Nosson Adler ZT”L) is that Nitel Nacht is aveilus (same as Tisha Bav) for when Yoshka was born.
Mitzvos can be done, chesed, as well as mundane chores. There are those who used to simply go to sleep early and waking up earlier to learn the next day. This, says the Chasam Sofer (likutim 31) was the custom of the Yeshivos in Hungary.
The Chasam Sofer (likutim 32) writes that they only permitted card playing and other such useless behaviors for those whom card playing is an improvement over what they would be invariably doing otherwise – but Bnei Torah may not waste their time with such things on nitel.