Fantasy sport, sometimes referred to as rotisserie or roto, is a range of games in which players assemble virtual or imaginary teams composed of stand-ins (proxies) for actual professional athletes. These teams compete based on the statistical results of the players in real games. Fantasy sports have gained immense traction in India, providing sports enthusiasts with a unique and engaging way to interact with their favourite games. However, there has been ongoing discussion and examination of the legality of fantasy sports in India.
Gaming—An appraisal into the differentiation in India
Games in India are differentiated into two broad gamut – games of skill and games of chance.
The games being completely based upon a random element of luck and probability are called games of chance. Their functioning is akin to gambling. Any person can play these without any prior experience or knowledge. e.g. Ludo, rolling a die and picking a number. These are illegal in India.
The other set encompasses games of skill. These are played based on a person’s prior knowledge or experience of the game. A person will require skills such as analytical decision-making, logical thinking, capability, etc. Some games might also require some initial training to win. Such games are considered legal by most of the Indian states.
The question as to what is considered a ‘skill-based game’ and what is considered a ‘chance-based game’ is a question to be determined based on the scheme of a game and such a distinction is a crucial factor in determining the legality of fantasy sports in India.
The Debate: Skill or Addiction
Though gambling has always been associated with crime and addiction, it has been prevalent in India for centuries, for instance, in the Mahabharata. All 28 states of India have their respective regulations on the decisions about gambling. The working of fantasy sports encompasses depositing money into the apps for the building of a virtual team of players which then plays against a rival team. The result of this virtual game is based on the real-time performance of the players on the ground. The leaderboard displays the results wherein the teams topping it reap maximum profits followed by those at last, which lose the betting amount. The cycle continues with some users betting money repeatedly while some resorting to recusal. Some examples of such apps are – Dream11, MyTeam11 and MPL.
A game of skill is where participants must use their skill, talent, knowledge, and methods to study, think, and devise techniques to win. It is a legal activity, according to the interpretation of Article 19(1)(g) of the Indian Constitution.
The saga of judicial precedents and trajectory in the legality of fantasy sports in India.
- Shri Varun Gumber v. UT of Chandigarh & Ors[1]
The legality of Dream11 was questioned before the Punjab and Haryana HC. The court relied on the landmark judgment of Dr. K.R. Lakshamanan v State of Tamil Nadu and Anr.[2], which called horse racing to be a game of skill. The Hon’ble High Court adjudged that “While evaluating each athlete or sportsperson’s relative worth against all other athletes or sportspeople available for selection, as well as studying the rules, regulations, strengths, and weaknesses of each player or athlete, playing a fantasy sports game requires the same level of skill, judgment, and discretion from the player.” It further added that under the Public Gambling Act of 1876, no sporting activity that qualifies as a game of skill shall be considered gambling, and hence, the company making or organizing such sports is protected under Art 19(1)(g) of the Constitution.
- Gurdeep Singh Sachar v. Union of India[3]
A PIL was filed before the Bombay HC alleging Dream11 of wagering and gambling under the pretext of a skillful sports setup. This was quashed by the court citing the P&H HC decision and further clarified that the accusation of GST avoidance or incorrect classification is directly predicated on the resolution of the question, which is “whether Dream 11’s operations qualify as “gambling” or “betting,” which is untrue and thus the game does not include any violations of the CGST Act or CGST Rules. This was later affirmed by the Rajasthan HC in the decision of Chandresh Sankhla v. State of Rajasthan & Ors.[4]
- Avinash Mehrotra v. The State of Rajasthan & Ors.[5]
The Hon’ble Supreme Court upheld the aforementioned prior decisions and held that fantasy sports are based on skill and do not constitute gambling.
Analysis
When one considers all of the previous gambling-related legislations, it’s simple to see that opposition to it was strong. In the 1800s, gaming was outlawed, and running a casino in India was prohibited under The Public Gaming Act of 1867, the Bombay Prevention of Gambling Act of 1887, and the Delhi Public Gambling Act of 1955. However, there are no new gaming acts even more than a century later. The judicial precedents set the position clear w.r.t Dream11. To create self-regulatory measures, the Fantasy Sports Trade Association (FSTA) has been working globally and in India, trying to address legal issues and promote ethical gaming activities. These projects seek to solve issues with player safety and responsible gaming, as well as to establish industry standards and encourage fair play.
Conclusion
The legality of fantasy sports in India remains a nuanced and evolving issue. While some courts have recognized the skill involved in these games, the lack of a uniform legal framework across all states poses challenges for operators and enthusiasts alike. As the industry continues to grow, there is a pressing need for clear and comprehensive regulations to ensure a stable and secure environment for fantasy sports in India. Until then, participants and operators must navigate the legal landscape with diligence and awareness.
[1] CWP No. 7559
[2] 1996 AIR 1153
[3] PUBLIC INTEREST LITIGATION NO. 16 OF 2019
[4] D.B. Civil Writ Petition No. 6653/2019
[5] SPECIAL LEAVE PETITION (CIVIL) Diary No(s). 18478/2020
This article is written and submitted by Shreshth Jindal during his course of internship at B&B Associates LLP. Shreshth is a 2nd year year B.A.LL.B (Hons.) student at NLU, Jodhpur.