The LexGaze Weekly - COVER STORY

Legality of Fantasy Sports in India - Game of Skill or Chance

Adv. Himanjali Gautam

Nov 22, 2020

Issue 22

"The concept of 'skill' and 'chance' is not mutually exclusive; they exist in tandem. Every skill-based game has a degree of luck involved."

· Introduction to Fantasy Sports in India

In the world of fantasy sports, where a person has a smartphone can use numerous platforms functioning in India. The features of instant creation of teams, a nominal entry fee charged for participating in tournaments, and start winning cash prizes. Some people earn thousands and lakhs of rupees on this platform and while  it might be new in India, it is  not abroad. The fantasy sports market is a big empire there. In the United States, this  market is worth $7.8 billion in 2020, says market intelligence firm IBISWorld. In India, a FICCI-EY report indicatd the online gaming segment's cost was worth Rs 6,500 crore in 2019, and by 2022, it would touch Rs 18,700 crore. The IPL fantasy league will be worth $1 billion, says KPMG. The sector is touching new heights with the years coming. Many reasons and factors are playing behind this rise.

· Legal Position of Fantasy Sports in India

The Bombay High Court, 2019, said that these platforms did not have gambling; hence, they were illegal. It stated that the users have to use their skills to win. The flip side  indicates that there is gambling involved too. These fantasy sports games have just named themselves a game of skill; this is not enough to prove that they are a game of skill. It is the operator's responsibility to prove that their skills play a crucial and predominant role in determining the winning outcome. The entire legality of fantasy sports in India depends on whether the game qualifies for the "Game of skill" or "Game of chance." The game of skills refers to genuine skill gaming, where the user's skill determines the winning. On the contrary, the game of chance points to gambling. The controversy regarding the treatment of Dream 11 in 2019 has been dealt with by courts in cases of Varun Gumber v. Union Territory of Chandigarh and Gurdeep Singh Sachar v. Union of India. Furthermore, upheld the same as a skill game based on the procedure and rules followed in the game.

On September 29, 2020, Y. S. Jaganmohan Reddy led the Andhra Pradesh government to pass an ordinance intending to amend Andhra Pradesh Gaming Act 1974. The ordinance banned all kinds of fantasy sports. The 132 games and sites include Dream 11, rummy, poker, where monetary transactions are involved. In reply to a question where it was asked about the residents of Andhra Pradesh using Dream 11, the company replied by saying that the users of Andhra Pradesh could no longer use Dream 11 or any such fantasy sports. The ordinance removed the exception on Dream 11 as a game of skill as it has banned both the type of games. It is a significant blow to fantasy sports, especially to the unicorn, Dream 11, who was the sponsor of IPL 2020.

· Configuration and Self-Regularisation

India only had ten fantasy platforms back in 2016. The number has risen  to 140.  Several start-ups and investors are keen on investing in fantasy sports after realizing the immense potential this industry has. The investment would be more if there would be clarity in the legality of fantasy sports in the country where the game should have more than 50% inclusion of skill to be counted as out of betting and illegal. Courts have not yet analysed some other fantasy gaming formats and have not offered any perspectives, decisions, or investigations of some other fantasy gaming platform's configuration. Whether the game lies in the spectrum of skill or chance depends and varies from case to case and game to game. There are no set of regulations by the government. As a result, fantasy industry standards are regulated by the Federation of Indian Fantasy Sports (FIFS),  earlier known as the Indian Federation of Sports Gaming IFSG, which was India's first and only Fantasy Sports self-regulatory industry body that was established  in 2017. It would be self-regularising until the government comes out with some regulations, standards, and laws.

· The Road Ahead

Taking into consideration the legality of fantasy sports in India, many of the investors hesitate to invest. The presence of fantasy sports makes them the unicorn. There are various drawbacks related to data protection and privacy that are linked to sports. Such sports have more KYC and the details of the bank accounts of the people than the broadcasters. The legality of fantasy sports will get clearer only through the emergence of sui generis laws of governance. There should be categorical inclusion of "Games of skill" with clear rules specified to avoid wide interpretational confusions.