INTRODUCTION
Fantasy sports games are games in which users create fantasy teams from a list of players to play live games on a given day based on certain conditions. Real-life stats are converted to fantasy points, which means the better the selected player does in real life, the higher the user’s fantasy points.[1] Such games can be played on applications such as My Team 11, Mobile Premier League (MPL), FanFight, and Dream 11.
According to reports from the Federation of Indian Fantasy Sports (FIFS), the first and only self-regulatory body relating to fantasy sports in India, more than 87% of those who play such sports say that they are now researching and collecting more information to be better prepared and have a clearer strategy while playing fantasy sports.[2] This raises in one’s mind the question of whether the games are games of skill or games of chance. With the increase in popularity and usage of fantasy sports games, there have been many judicial pronouncements discussing the matter in a detailed manner. The aim of the discussion of this article is an overview of games of skill and games of chance, judicial pronouncements, measures taken by some states regarding fantasy sports, and reaching a conclusion.
GAMES OF SKILL VS GAMES OF CHANCE
The status of fantasy sports in India is hugely affected by the definition and distinction between games of chance and games of skill.
A game of skill is one that requires the player’s knowledge. To put it another way, in order to win, a player must devote time to practicing, learning, and perfecting the skill. In such games, one’s ability to win is determined by how well one understands the rules and popular practices, as well as how effectively one plays. The player can become an expert and assure success over time.[3] A game of chance, on the other hand, is one in which chance prevails skill and the outcome is influenced heavily by luck or chance. In such games, it is impossible to anticipate who or what will win as the determining factors are incidental. Such games can be won in the short term, but they are not viable in the long term.[4]
Except for Goa, Sikkim, and the Union Territory of Daman, every state in India expressly prohibits any kind of gambling, betting, or wagering on games of chance while exempting ‘games of mere skill’. However, states like Assam, Andhra Pradesh, Nagaland, Odisha, Sikkim, Karnataka, Tamil Nadu, and Telangana have imposed restrictions on games of skill, along with the games of chance.
As far as the interpretation of the Supreme Court is concerned, the words ‘mere skill’ have been interpreted to mean “preponderantly of skill”.[5] Further, it has been held that conducting games of skill does not amount to “gambling”. It amounts to commercial activity and thus, is entitled to constitutional protection.
THE TEST APPLIED BY THE INDIAN COURTS TO RESOLVE THE SKILL VS CHANCE DEBATE
The question of whether a game is a game of skill or chance is a question of fact and is decided on a case-to-case basis. For deciding on such a matter, the Indian courts have adopted a test, which is borrowed by the courts of the U.S. The test is known as the “dominant factor test” or “predominance test”.[6] Card games like rummy and horse racing have been subjected to this test by the Supreme Court in the cases of State of Andhra Pradesh v. K. Satyanarayana[7] and Dr. K.R. Lakshmanan v. State of Tamil Nadu[8] respectively. As per this test, a game of skill is identified through the relative dominance of the degree of skill over the degree of chance.
REGULATION OF FANTASY SPORTS IN INDIA
The Federation of Indian Fantasy Sports (FIFS), which works independently of the government, is the only governing organization for fantasy sports in India. It focuses on the operating standards and the protection of customers’ interests pertaining to fantasy sports. FIFS hosts panel discussions on a regular basis as part of its flagship event “GamePlan,” where efforts in the fantasy sports industry are acknowledged.[9]
The Public Gambling Act of 1867 is the central act in India that criminalizes most aspects of games of chance or gambling but allows games of “mere skill’” under Section 12. Apart from this, as per the recommendations of the 276th Law Commission Report, games of skill may be exempted from the ambit of gambling. There is, however, no express qualification of fantasy games as ‘games of skill’ under any of the two regulations.
TRACING THE TIMELINE TO FANTASY SPORTS GAMES BEING RECOGNIZED AS ‘GAMES OF SKILL’
Nagaland Prohibition of Gambling and Promotion and Regularisation of Online Games of Skill Act, 2015
The Nagaland Prohibition of Gambling and Promotion and Regularisation of Online Games of Skill Act, 2015, established a regulatory regime for games of skill by classifying “virtual sports fantasy league games” and “virtual team selection games” as skill games, among other things. Fantasy sports games were not specifically found to be a “game of skill” in any Indian statute or judgment prior to the announcement of the Nagaland Gaming Legislation.
SHRI VARUN GUMBER VS. UNION TERRITORY OF CHANDIGARH AND ORS (2017)
Fantasy sports games were first ruled to be games predominantly based on skill by the High Court of Punjab and Haryana in 2017 in the case of Shri Varun Gumber v. Union Territory of Chandigarh and Ors[10]. In this case, Mr. Varun Gumber (the plaintiff) was a Dream 11 registered user. For participation in different leagues formed on the platform, he transferred a sum of INR 50,000 and spent up all of his credits by creating his own virtual cricket and football team and competing in Dream 11 competitions. In a lawsuit, the plaintiff claimed that fantasy sports games were not based on skill and that Dream 11’s activities qualify as “gambling” under the gambling legislation applicable to the state of Punjab.
The P&H High Court based its ruling on the Supreme Court’s decision in the Lakshmanan case, stating that fantasy sports games needed the same degree of judgment, discretion and skill as required in horse racing. The Court relied on the arguments that a user, while drafting his fantasy team on Dream 11, was required to:
- Choose a team with at least as many players as a real-world team to score points during at least one complete real-world match.
- Assess all of the available players to form a team and evaluate each player’s worth with the other players, while remaining unbiased towards a particular individual or team.
- Evaluate a player’s statistics based on knowledge and understanding of the performance.
- To pick a team, adhere to the upper limit of the spending restriction while ensuring that the team does not include players from a single real-world team (wholly or significantly). This pre-condition also ensures that a user does not create a situation that resembles betting on the performance of a single team.
- Continuously monitor the scores of players that have been drafted.
- Analyze the conditions of the other factors pertaining to the game, pitch, form of players, etc.
An appeal was made against the decision of the P&H High Court which was dismissed by a two-judge panel of the Supreme Court. This case acted as a precedent in cases Gurdeep Singh Sachar Vs. Union of India and Ravindra Singh Chaudhary Vs. Union of India of the Bombay and the Rajasthan High Court respectively, which are discussed in the subsequent section.
Gurdeep Singh Sachar vs. Union of India (2019)
In this case[11], criminal public interest litigation was filed before the Bombay High Court that accused Dream 11 of carrying out gambling, betting or wagering under the guise of ‘online fantasy sports gaming’ in violation of applicable laws and evading taxes by levying goods and service tax in inadequate amounts on such offerings. Herein, the Court observed that winning or losing in fantasy sports was not dependent on the winning or losing of any team in the real world, unlike betting.
Ravindra Singh Chaudhary vs. Union of India (2020)
In this case[12], the Rajasthan High Court observed that the skill of the participant determines the result of the game having a ‘predominant’ influence on the outcome of the fantasy game. Further, it was observed that offering fantasy games such as Dream 11 necessitated a high level of expertise. As a result, it is a legitimate business activity that does not constitute wagering and is protected by Article 19(1)(g) of the Constitution.
SC upholding the judgment of the Rajasthan High Court
In 2020, the Supreme Court issued a stay order against the Bombay High Court’s judgment that fantasy sports games are games of skill. While the case is still pending, the Supreme Court of India has affirmed the legitimacy of fantasy sports in an appeal against the Rajasthan High Court’s ruling in August 2021.
STATES PROGRESSING TOWARDS LEGALIZING FANTASY SPORTS
In August 2021, the Madras High Court while hearing the case of ‘Junglee Games & Ors. Vs. State of Tamil Nadu’[13], completely struck down Part II of the Tamil Nadu Gaming & Police Laws (Amendment) Act, 2021 that put a blanket ban on all forms of online gaming, including games of skill, if played for a bet, money, wager, or other stakes. Further, it was observed that games of skill are no longer res Integra. With this, the Court focused on the necessity of regulating online gaming rather than prohibiting it outrightly.
In the same month, one of the officials of the Telangana government declared that the state is working on a set of new rules for online and fantasy gaming that will lead to the development and self-regulation of the online gaming sector.[14] This is a progressive step in a state where online and fantasy gaming are banned. This demonstrates that some states are becoming more willing to accept the economic impact of fantasy sports and regulate them since they have a great potential of generating revenue.[15]
CONCLUSION
From the above discussion, it can be concluded that success or failure in some of the fantasy sports games such as Dream 11 requires substantial application of skills of the player. Not all fantasy sports games, however, have been held to be games of skill. As a result, there is no uniformity or consistency regarding such sports and there is a need for legislative interference in the issue.
[1] Pratap Alexander Muthalaly, Fantasy sports in India, iPLEADERS (Feb. 4, 2021), https://blog.ipleaders.in/fantasy-sports-india/.
[2] Ibid.
[3] What Is Difference Between Game of Skill and Chance?, MID-DAY(June 16, 2021, 07:57 PM), https://www.mid-day.com/lifestyle/infotainment/article/what-is-difference-between-game-of-skill-and-chance-23178539.
[4] Sudhansu Sahoo, India: Fantasy Sports In India: A Report, MONDAQ (Sept 20 2021), https://www.mondaq.com/india/gaming/1112720/fantasy-sports-in-india-a-report.
[5] State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699.
[6] Gowree Gokhale1 & Rishabh Sharma, The ‘Skill’ Element in Fantasy Sports Games, http://www.nishithdesai.com/fileadmin/user_upload/pdfs/NDA%20In%20The%20Media/News%20Articles/180406_A_Legality_of_Fantasy_Sports_India.pdf.
[7] State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825.
[8] Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153.
[9] Supra note 4.
[10] Shri Varun Gumber v. Union Territory of Chandigarh and Ors., CWP No. 7559 of 2017.
[11] Gurdeep Singh Sachar Vs. Union of India (2019) 3 AIR Bom R (Cri) 467.
[12] D.B Civil Writ Petition No. 20779/2019.
[13] AIR 2021 MAD 252.
[14] Saumya Tewari, Telangana to implement new norms for self-regulation of fantasy gaming, MINT (Aug. 25, 2021, 09:10 PM), https://www.livemint.com/sports/news/telangana-to-implement-new-norms-for-self-regulation-of-fantasy-gaming-11629905232908.html.
[15] Supra note 4.
YLCC would like to thank Aditi Aggarwal for her valuable inputs in this article.
