Fantasy sports: game of skill or gambling?

The Indian festival of cricket, the IPL is approaching! Being the most popular sport in India, the audience engagement that the sport receives is the highest of all other sport. But now it is not just any other sport to watch or cheer for. Popularity of the same has given birth to a whole new different method of engaging with the sport and earn some money as well. The method that has taken strides in last few year is fantasy sports. Fantasy sports is sort of a virtual game, where participants assemble players from real teams to form a super team of their own and each player in the team amounts to some points, often known as fantasy team. Between whomsoever the match is going to take place, players form their own fantasy team choosing players from the both real playing teams and based upon the individual performance of each player in the fantasy team, overall performance, the participant gains cumulative points and is ranked against other participants. From a large prize pool, participants receive their subsequent rewards based on their rank.

 As much as exciting this maybe, and whatever positive reviews fantasy sports has received, a major question has popped up among the masses, which is, wouldn’t this be considered gambling?? All around the globe and in India as well, many cases have been asking the same question which have resulted from some grievance faced by the participants. Let’s take a look at some of them and see what our Honourable Courts have said about the issue:

First came the issue of the debate between in game of chance and game of skill. This issue had been substantially discussed in the case of  Shri Varun Gumber v. UT of Chandigar & Ors. In its ruling the High court of Punjab & Chandigarh placed reliance on the judgment of Dr. K.R. Lakshamanan v State of Tamil Nadu and Anr. where the question that arose was if betting on horse racing would be considered a game of skill or game chance and what constitutes as a game of skill. The court primarily opined that any game or competition where the outcome depends on the use of substantial degree of skill while evaluating the chances of success, would be considered as a game of skill. Despite there being an element of chance or luck in determination of the outcome, if there is preponderance of skill in determining the said chance and outcome, it would still be considered a game of skill and would not fall within the ambit of gambling. Hence horse racing was not considered a game of chance but game of skill. Hence, upon relying on the aforementioned judgment, the court in the case of Shri Varun Gumber (supra), where the facts of the matter were as such that the petitioner had filed the criminal petition against Dream 11 upon incurring a substantial financial loss, alleged that the activities of the company can be considered to be in the form of gambling, the court opined that fantasy sports requires preponderance of considerable skill, knowledge, condition of the cricket match, judgment in formation of team in the game, which carry substantial influence upon the outcome of the success, hence it is to be considered a game of skill and not in the ambit of gambling. The court said that playing fantasy sports requires the user is required to have knowledge of the skills of the athletes and condition they play in as well as the knowledge of rules and regulations factoring into the success of the play. Hence the court ultimately held that the element of skill has great influence upon achieving success in the game and hence the court held that the activities of the company does not falls within the ambit of gambling.
Hence, the case of Shri Varun Gumber served as a major judgment in  determination of the of judicial opinion upon the issue and carried great influence upon the judgments that followed.

 In the case, Gurdeep Singh Sachar vs. Union of India, the case shed light on this question along with the issue of applicability of GST in the transactions that happen on a popular fantasy sport platform, Dream 11. Hon’ble’ High Court in it’s ruling said that ‘fantasy sports’ (herein Dream 11) are not ‘game of chance’ but rather ‘game of skill’. The Bombay High Court ruled in favor of Dream11. This ruling was based on the understanding that the outcome of the games is not dependent on the winning or losing of any particular team in the real world on any given day, rather it is the analytical skill, decisiveness and thorough research about the game and players, by the participant plays the factor in determining the outcome of winners.

 Similarly in the case of Chandresh Sankhla v. State of Rajasthan & Ors, the Rajasthan High Court gave similar ruling while relying on the judgment of Varun Gumber vs. Union Territory of Chandigarh & Ors., which discusses the same issue and delves deep into understanding the distinction between game of chance and game of skill and determining factor in both of them. This case also serves as landmark judgment for the cases that followed after it.  And lastly, a special leave petition, Avinash Mehrotra vs. State of Rajasthan & Ors., was filed in the Apex Court challenging the legality of fantasy sports in India whether platforms such as ‘Dream 11’ to be considered gambling and illegal. The Hon’ble’ Supreme Court upheld the decision of the Rajasthan High Court to the effect that the online fantasy game ‘Dream11’ involves skill and does not amount to gambling, following which the Hon’ble’ Supreme Court rejected the special leave petition. Hence, as per the Indian judiciary it can be assumed that fantasy sports are considered games of skill which are not just dependent upon the chances or just luck, or whos is not dependent on luck alone, but rather an element of skill even mere plays an important factor in determination of the outcome.

Conclusion:

Whether fantasy sports are to be considered as a form of gambling or not, is subject to lot scrutiny by not only the Indian judiciary but as well as general public. A large number of demographic of India is getting invested in these games to earn some cash for themselves, however it also brings about the plethora of challenges or violations in with respect to financial discrepancies and which invites the need of solidified conclusion and stance by the judiciary to the debate to address these.

Author: Aditya Saini, A Student at Bharti Vidyapeeth Deemed to be university, in case of any queries please contact/write back to us at support@ipandlegalfilings.com or IP & Legal Filing