Online Fantasy Sports in India: A Game of Skill or Chance?

In common words, fantasy sports games games are games that involve users who draft fantasy teams based on certain pre-conditions from a selective list of players who are scheduled to play live games on a particular day. The users then have to pay an entry fee to enter a contest and enter a pool for distribution among the users after deduction of a certain fee by fantasy sports games providers (the App). The users generally draft their teams based on their application of knowledge, attention, experience and access to information regarding the relevant sport. The said user then collects points based on the draft team he has prepared to enter into the pool of competition. The users are further ranked based on the points their selected players accumulate in that particular contest as per a set of point-rules/scoring metrics pre-determined by the service provider.

While dealing with this issue of whether the fantasy sports like Dream 11 qualifies as a game of chance or a game of skill, various High Courts, after careful analysis of different facts and circumstances, have held it to be a game of skill. 

The Hon’ble Punjab and Haryana High Court in Varun Gumber v. Union Territory of Chandigarh (2017)9, has held that games such as horse, boat and foot racing, football, baseball, chess, golf are games of skill and significant judgement and not a game of chance. However, in a fantasy game, a participant user who builds a virtual team would require considerate skill, knowledge, judgement and discretion, as the participant has to estimate the relative value of each athlete/sportsperson as against all athlete/sportsperson available for selection. He is required to study the strengths and weaknesses of the athlete which would determine the result of the game and his chances of winning a contest. The Hon’ble Court further held that a better result in a fantasy sports game like Dream 11’s basically arises out of a user’s own exercise of superior knowledge, judgement and attention to detail. It was therefore held to have involved the element of skill which had a dominant influence on the outcome of the Dream 11 fantasy, therefore, not falling within the activity of gambling which was prohibited and was termed as a “game of skill”. An appeal was filed in the Supreme Court but the same was dismissed in 2019.            

A similar finding was also reached by the Hon’ble Bombay High Court in the case of Gurdeep Singh Sachar Vs. Union of India and Ors. (2019)10 wherein the Court observed that it was evident that the success in Dream 11 fantasy sports depends upon the user’s ability to exercise his skill based on superior knowledge, judgement and attention. Therefore, the result is not dependent on the winning or losing of a particular team in the real world game on any particular day. It is without an iota of doubt, a game of skill and not a game of chance. The Court held that “The attempt to reopen the issues decided by the Punjab and Haryana High Court in respect of the same online gaming activities, which are backed by a judgement of the three judges bench of the Apex Court in K.R. Lakshmanan (supra), that too, after the dismissal of SLP by the Apex Court is wholly misconceived.”

A Special Leave Petition was filed by the Union of India against the Bombay High Court judgement. However, it was dismissed by the Hon’ble Supreme Court. However, Hon’ble Justice Shri R. F. Nariman and Justice Shri S. R. Bhat gave liberty to the Union of India to file a limited review petition before the Bombay High Court with respect to the issue of Goods and Service Tax evasion in that case.

Another petitioner approached the same bench to seek a review of the same case However, this time around the Supreme Court irked a stern statement that: “It is reiterated that in accordance with our order dated 13.12.2019, the only scope of the review filed in the Bombay High Court is with respect to GST and not to revisit the issue as to whether gambling is or is not involved.”

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The Rajasthan High Court in October 2020 in the case of Chandresh Sankhla vs State of Rajasthan (2020)11 dismissed a writ petition filed in the nature of a Public Interest Litigation and it opined that the issue of considering Dream 11, the fantasy sports game, having any element of betting/gambling is no more res integra in view of the judicial dictums and orders passed by the Bombay High Court, Punjab and Haryana High Court and SLPs (discussed above) that have been dismissed against the orders of these High Courts.

A Special Leave Petition12 was filed to sort out the ban of the online game Dream11. However, the same was dismissed and the judgement of Rajasthan High Court (discussed above) was upheld. The Apex Court was asked to consider a New York Supreme Court judgement (2020)13 which had to answer a similar challenge wherein it was held that the law challenged as unconstitutional on the ground that it violates the prohibition against gambling in NY Constitution, the Court was of the opinion that although participants in interactive fantasy sports contests may use their skill in selecting teams they no control whatsoever on how the athletes on their Interactive Fantasy Sports would actually perform in the real world. 

We can, therefore, state that relying on the aforesaid cases, the Courts have carefully evaluated the amount of skill involved in a particular game so as to not amount to gaming or ‘gambling’ as prohibited under the Indian gambling laws.

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