Are Fantasy Sports Platforms Like Dream11 Under Gambling Laws in India?
Introduction
Fantasy sports websites such as Dream11, My11Circle, and MPL have become extremely popular in India. Users can form virtual teams using actual players and receive points based on the performance of their players in real matches. Whether these websites come under Indian gambling laws or not has been argued in courts and among legal professionals. The response to this question would rely on whether fantasy sports are viewed as a game of chance or a game of skill in Indian law.
Legal Framework Regulating Gambling in India
The main law that regulates gambling in India is the Public Gambling Act of 1867. The act forbids running or entering a gambling house. It does not specifically touch upon online games or fantasy games. As gambling is a state subject, the laws on betting and gambling vary from state to state. States such as Sikkim and Nagaland have legalized online gaming, while some other states such as Telangana and Andhra Pradesh have prohibited online gambling, including fantasy sports.
Game of Skill versus Game of Chance
The Supreme Court of India and a number of High Courts have distinguished convincingly between games of skill and games of chance. A game of skill is one in which knowledge, judgment, and experience are applied, while a game of chance is one that is largely dependent on luck. Games of skill are exempt from the laws of gambling in India for the most part.
Dream11 and other such sites contend that fantasy sports involve users to break down player performance, team lineups, and other statistical variables before they can choose a team. This, according to them, constitutes a game of skill and not luck. The courts have concurred with them in many cases.
Legal professionals have also noted that such demolitions usually occur without adhering to municipal and land ownership regulations. According to Indian law, the demolition of a property must be preceded by notice to the owner, a chance for them to reply, and a set procedure to ascertain the legality of the building. A number of cases have indicated that these procedures were not adhered to, prompting Supreme Court interventions.
Legal professionals have also noted that such demolitions usually occur without adhering to municipal and land ownership regulations. According to Indian law, the demolition of a property must be preceded by notice to the owner, a chance for them to reply, and a set procedure to ascertain the legality of the building. A number of cases have indicated that these procedures were not adhered to, prompting Supreme Court interventions.
Legal professionals have also noted that such demolitions usually occur without adhering to municipal and land ownership regulations. According to Indian law, the demolition of a property must be preceded by notice to the owner, a chance for them to reply, and a set procedure to ascertain the legality of the building. A number of cases have indicated that these procedures were not adhered to, prompting Supreme Court interventions.
Court Rulings on Fantasy Sports in India
The Supreme Court and some High Courts have held in favor of fantasy sports being a game of skill. In 2017, the Punjab and Haryana High Court held that Dream11 involves a lot of skill, judgment, and knowledge, and thus falls outside the gambling laws. The Rajasthan High Court and Bombay High Court have also delivered similar orders, upholding the contention that fantasy sports is not gambling.
In 2021, the Supreme Court upheld these rulings, affirming that fantasy sports involve skill and cannot be considered gambling. This legal support has enabled Dream11 and other sites to function in the majority of Indian states.
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State-wise Restrictions
Though the law favors fantasy sports as a skill game, a few states have enforced bans. Telangana, Andhra Pradesh, Tamil Nadu, and Odisha have legislated that online betting and fantasy games are illegal. The reasoning given by these states is that though requiring skill, fantasy sports entail money transactions and also the potential to become addictive, thereby classifying it as a game of chance.
For instance, Telangana revised its Gaming Act in 2017, declaring all types of online gambling unlawful, including fantasy sports. In the same way, Tamil Nadu enacted an ordinance in 2021 prohibiting online gaming for stakes, although the Madras High Court subsequently overturned it. Yet again, though, the Tamil Nadu government brought back the ban in 2022, showing how the legal ambiguities persist.
Government’s Stand on Fantasy Sports
The federal government has not drafted any particular laws for fantasy sports and left it up to individual states to govern them. Yet, the NITI Aayog, which is a government think tank, has suggested a regulatory mechanism for online fantasy sports. In 2020, NITI Aayog published a draft guideline stating that fantasy sports platforms must be identified as a distinct industry and governed accordingly.
The Ministry of Electronics and Information Technology (MeitY) has also weighed the option of bringing online gaming under a regulatory regime to delineate skill-based platforms from betting. This is aimed at bringing legal certainty and consumer protection while enabling genuine platforms to carry on business.
Economic Impact of Fantasy Sports
Fantasy sports websites are a very valuable contribution to the Indian economy. As per a report by the Federation of Indian Fantasy Sports (FIFS) and KPMG, the fantasy sports sector was worth more than ₹34,000 crore in 2021 and has the potential to grow even more. Fantasy sports websites create jobs, receive investments, and remit huge amounts of taxes to the government.
The Goods and Services Tax (GST) regime is applicable to fantasy sports, with a tax of 18% on platform fees. The GST Council has, however, been mulling over raising the tax rate to 28%, which may affect the growth of the industry.
Consumer Protection and Responsible Gaming
As the industry of fantasy sports continues to expand, issues related to responsible gaming and consumer protection have become more prominent. Most users, particularly young players, spend a significant amount of money on fantasy sports and lose money. To tackle such issues, operators like Dream11 have implemented measures of responsible gaming, including deposits limits, self-exclusion, and awareness initiatives.
The All India Gaming Federation (AIGF) and FIFS have also suggested self-regulatory measures to prevent addiction and ensure fair play. These include age verification, guidelines for transparency and grievance redressal to safeguard users against fraud.
