The Legality Of Fantasy Sports In India

By Ikigai Law | Digital Gaming | 0 comment | 15 July, 2019 | 16

Fantasy sports are no longer an alien concept in India. With the introduction of gaming websites like Dream11, which recently became India’s first gaming Unicorn,[1] fantasy gaming has taken a front seat. According to a recent IFSG-KPMG report,[2] there are about 20 million fantasy gamers in India currently and this number is expected to rise to 100 million by the end of 2019. However, despite its soaring popularity there is no legal definition or an inclusive list of games that could be termed as “fantasy sports”. With the Indian online gaming industry projected to become a one billion dollar industry by 2021,[3] the entire online fantasy gaming industry is set to witness tremendous growth, which makes it important to understand the law around fantasy sports in India.

Understanding fantasy sports

A fantasy sport is a game that requires users to draft fantasy teams based on certain criteria from a list of real sports players scheduled to play a live sport on a given day. Users typically pay an entry fee to enter a contest. After the deduction of a service/administrative fee by the platform operator, the entry fees are pooled for distribution among the users on the platform (“Entry Pool”) depending on their performance. Users draft teams based on their knowledge of the game (gathered through systematic research), attention, experience and adroitness regarding the underlying sport. Based on the performance of the real sport players selected by the user to draft his/her team, the user collects points. Points are awarded to users according to the scoring sheet and performance of their selected players in the real match. Users are later ranked based on these points and accordingly receive distributions from the Entry Pool.[4]

Legal position

The legality of fantasy sports in India is dependent on whether the game qualifies as a ‘game of skill’ or a ‘game of chance’. Games of chance fall under the ambit of gambling and are thereby restricted by state gambling laws.[5] However, games involving considerable and substantial degree of skill (mathematically, more than 50%) fall outside the scope of gambling laws[6] and hence are legal in India.[7]

Whether a fantasy sport is a game of chance or a game of skill is based on the modalities of each game.[8] Additionally, courts have used the ‘predominance of skill test’ to determine that horse racing^[9] and card games such as rummy[10] and poker[11] are ‘games of skill’.

The question of whether the fantasy sport offering by Dream11 is a ‘game of skill’ was posed before the Punjab and Haryana High Court in Varun Gumber v. Union Territory of Chandigarh[12] and later before the Bombay High Court in Gurdeep Singh Sachar v. Union of India[13] (collectively “Dream11 Judgements”). Both the Dream11 Judgements upheld that the fantasy sports offering by Dream11 is a ‘game of skill’ basis the following submissions made by the respondent company:

users are required to deploy considerable skill, judgement and discretion while drafting their fantasy team;^[14]
users are required to study the rules of the game and the point system deployed by the fantasy operator; for example, in the fantasy cricket game of Dream 11, a user needs to evaluate anticipated statistics for skills such as batting average, total runs, number of half-centuries and centuries, strike rate, economy rate, five wicket hauls;[15] and
success arises out of users’ exercise, superior knowledge, judgement and attention; for example, in the fantasy cricket game of Dream11, bonus points are awarded to the gamers based on the performance of virtual team’s captain (x2 points) and vice-captain (x1.5 points).[16]

The Dream11 Judgments have held Dream11 to be a ‘game of skill’. However, it should be noted that these courts only examined the format of Dream11 and did not offer any views or analysis on the formats and offerings of other fantasy sports operators. Currently, there are approximately 59 other fantasy sports platforms in India, and all of them have a distinctive format and points system to judge the performance of each player – all of which may/may not judge the skill of the player in drafting a fantasy team.

In the table below, we analyse the formats of eleven fantasy sports operators^[17] in India to see which of them most closely fulfil the criteria analysed by the court in the Dream11 Judgements (discussed above).

Assessment Criteria	Dream11[18]	My11 Circle[19]	Fantain[20]	Balle Baazi[21]	My Team 11[22]	Faboom[23]	Fanfight[24]	Funtush 11[25]	Spoxid[26]	11 Wickets[27]
Is there option to designate captain and vice-captain?	Yes	Yes	Yes	Yes	Yes	No	Yes	Yes	Yes	No
Are points allotted for the strike rate of the batsmen?	Yes	Yes[28]	Yes	Yes	Yes[29]	Yes[30]	Yes	Yes[31]	Yes	Yes
Points for good economy rate of the bowler?	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes	No	Yes
Bonus points for centuries and half-centuries	Yes	Yes	No	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Bonus points for 5-wicket hall	Yes	Yes	No	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Is there a provision for starting points of players?	Yes	Yes	No	Yes	No	Yes	Yes	Yes	Yes	No

In addition to the criteria in the Dream11 Judgements, other factors such as negative points for poor performance (for instance, getting out on a duck while batting) and different point systems for different game formats (like test cricket, ODI and T20 in cricket) are important considerations to judge the performance and skill of players. From the table above it is clear that all fantasy sport platforms do not adhere to a sole gaming format, and vary considerably from each other. The basis on which the fantasy operators identify skill and designate points for a particular game is also ambiguous. Hence, it is not safe to assume that all fantasy sports regardless of the criteria adopted by them to determine skill are “games of skill” on the basis of the Dream11 Judgements. The Dream11 Judgements were specific to a particular game format provided by Dream11. Moreover, the ‘predominance of skill test’ is in itself subjective and varies depending upon the fact and circumstances of the case.

With the growing number of users that pursue fantasy sports as a serious profession, the rules around these games need to be determined carefully. This can be achieved either by adopting industry-wide guidelines or an assessment of individual game formats by a supervisory body. In the end, the growth of fantasy sports and retention of users on a platform will depend on the degree of skill and competitiveness offered by the game format and the platform.

(Co-authored by Sarthak Doshi, Associate at Ikigai Law, with assistance from Srishti Sharma, a fourth-year undergraduate student of Rajiv Gandhi National University of Law (RGNUL), Punjab during her internship with Ikigai Law)

[1] Business Today, Dream11 becomes India’s first gaming unicorn with investment from Steadview Capital, available at https://www.businesstoday.in/current/corporate/dream-11-gaming-unicorn-steadview-capital-dream-11-becomes-indias-first-gaming-unicorn-with-investment-from-steadview-capital/story/335465.html.

[2] The evolving landscape of sports gaming in India, KPMG and IFSG, available at https://www.ifsg.in/wp-content/uploads/2019/03/The_Evolving_Landscape_of_Sports_Gaming_in_India.pdf.

[3] Online gaming in India: Reaching a new pinnacle, KPMG and Google, available at https://assets.kpmg/content/dam/kpmg/in/pdf/2017/05/online-gaming.pdf.

[4] See https://www.ifsg.in/wp-content/uploads/2018/03/FantasySportsPublication.pdf.

[5] Under the Constitution of India, state legislatures have been entrusted with the power to frame state specific laws on ‘betting and gambling, Constitution of India, Seventh Schedule, List II, Entry No. 34.

[6] Section 12, the Public Gambling Act 1867.

[7] State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825; and Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153.

[8] Manoranjithan Manamyil Mandram v. State of Tamil Nadu, AIR 2005 Mad 261

[9] Dr. K.R. Lakshmanan v. State of Tamil Nadu, AIR 1996 SC 1153.

[10] State of Andhra Pradesh v. K. Satyanarayana, AIR 1968 SC 825.

[11] Kizhakke Naduvath Suresh v. State of West Bengal, W. P. No. 13728 (W) of 2015.

[12] Varun Gumber v. Union Territory of Chandigarh, 2017 (4) RCR (Criminal) 1047.

[13] Gurdeep Singh Sachar v. Union of India and Others, Bombay High Court, Criminal PIL Stamp No. 22 of 2019.

[14] Paragraph 19, Varun Gumber v. Union Territory of Chandigarh.

[15] Paragraph 19, Varun Gumber v. Union Territory of Chandigarh.

[16] Paragraph 20, Varun Gumber v. Union Territory of Chandigarh.

[17] We have mapped these platforms on the basis of the current members of the IFSG – a federation of major fantasy operators in the country.