Ritvik Chouhan, a 2nd year student of Institute of Law, Nirma University, Ahmedabad, discuses the evolution of online fantasy sports gaming in India.

Introduction

With advanced technology, fantasy sports activity is becoming an intrinsic part of Indian society from the last decade. The participation opportunity and engagement in the landscape of online gaming is increasing day by day and will soon surpass 100 million users.[1] The growing popularity brings more problems for the fantasy leagues to not fall within the ambit of gambling. The legality of online fantasy sports was questioned and the debate of skill v. chance was brought up in the Supreme Court.[2]

An attempt has been made here to define fantasy sports and the present debate between the games of ‘chance’ and games of ‘skill’. The next part will deal with the general laws of India that are specifically related to online gaming. I have concluded by elaborating on some landmark cases, which are significant in defining fantasy sports and their legality in the present time.

What are Fantasy Sports?

Online Fantasy Sports,[3]is an online prediction game where participants assemble a team virtually using real-life players. They have to do so by using the points given to them. They are supposed to pay the token money for participating in the contests.

The participants are considered to be the manager of the team, as they have the right to select players, make changes and substitute in the virtual team. They earn points based on the players’ real-life performance during the course of the match. Participants play against each other and later are ranked based on the score sheet and performance of their selected player and receive awards accordingly from the pool.

Predominance: Skill or Chance

Evidently, online fantasy sports are emerging all around the world. Courts of different countries have a different perspective, thus the ‘Dominant Factor Test’,[4] is considered to be the best approach for categorising between chance and skill. This test helps in determining the required assessment and also whether chance or skill is the dominating factor in deciding the result of the game.

However, this dominant factor is always inclined towards skill. In the landmark judgement of Humphrey v. Viacom,[5] the plaintiffs questioned the legality of an online fantasy sports game and claimed that participants constitute a ‘wager’ and therefore, is a game of ‘predominance of chance’. In arguendo, the court held that fantasy sports are ‘skill games’, depending on the skills of the participant, experience in choosing players, adding and removing players throughout the season, and determining the player who will be in playing and who will be on the bench.

Further, the evidence presented in the expert study prepared by Prof. Zvi Gilula revealed that even mathematical research presents that online gaming’s are ‘skill-based games’.[6] The three premises were made for the fantasy sports game:

(a) Performance of a player affect the result directly,

(b) Statistics tell how good a skilled and well-informed person does better than the rest,

(c) A player is more likely to win by executing skills and analysis of the game acquired by them.

Conclusively, when a skilled player with his/her knowledge of the sport, competes against an unskilled one, the former is likely to come out victorious ‘most’ of the time. Here, the term ‘most’ is inclined towards the predominance of skill and not a chance.

Contextualising Fantasy Sports Laws in India

The laws of India always makes a difference between skill and chance and set down a total ban on participating and offering of the game of chance for money, on the other hand, allows game participation in games of skill. India has seen a constant debate over games of ‘chance’ and games of ‘skill’ from the last decade. Even some state laws differ in respect to games of skill and chance with differential treatment,[7] with the former permitted and the latter prohibited.

The Matrix of Current Legal Scenario of India

The two main statutes that govern gaming in India are Public Gambling Act, 1867 (hereafter ‘PGA’) and the Prize Competitions Act, 1955 (hereafter ‘PCA’). However, neither of them talks about online gaming, due to which there is always a tussle between chance and skill in India. While PCA is any prize competition, in which prizes depend on solving a puzzle are given. It also sets down restrictions on organising tournaments for prizes. On the other hand, the provision of PGA will not apply to a ‘game of mere skill’ if it comes under the ambit of Section 12 of the PGA.[8] Thus, differentiating between the game of “mere skill” and the game of “chance”.

Although, there is no substantial definition of ‘mere skill’, the Apex Court, in the case of State of Bombay v. R.M.D. Chamarbaugwala,[9] interpreted the word as ‘preponderantly of skill’. Though there is a presence of an element of chance, the competition needs a ‘substantial degree’ of skill to play.

Even the Law Commission of India in his report,[10] recommended that online sports betting is majorly determined by the knowledge of the player and his selection of the team. This report contends that this is a blatantly implausible claim because it is clearly identifiable the difference between the average players and the top performers’ points; hence, it cannot be entirely validated by ‘chance’. Hence, the result of games of ‘skill’ is determined by the expertise and knowledge of the players and cannot be considered as gambling, therefore, is protected under the Constitution of India.

Landmark Judgements of Indian Judiciary

The two primary cases that address the ‘skill and chance’ are State of Andhra Pradesh v. K. Satyanarayana (Rummy case),[11] and K.R. Lakshmanan v. State of Tamil Nadu (Horseracing case).[12] In both of the cases, the court agreed that no game alone would be a game of sheer talent and nearly all games contain an aspect of chance, however, negligibly small. In such cases, the ‘dominant factor test’ is commonly accepted by Indian courts, which involves the evaluation of dominant factors from chance or skill to decide the outcome of the game.

The landmark judgement – Varun Gumber Case

This was the first case in Indian history that address online fantasy gaming (Dream 11) and its legality. The 2017 case of Punjab & Haryana High Court Shri Varun Gumber v.Union Territory of Chandigarh & Ors.,[13] ruled, inter alia, that the fantasy sports games required the same level of skill, judgment and discretion as in case of the horse racing. In the abovementioned case plaintiff lost INR 50,000 while playing on Dream 11.com and contended it to be a ‘wager’ and against PGA. The Court while considering the ‘predominance test’ held that there was a predominance influence of the element of skill on the result of the game. The court considered the following format of the game:

  • A player needs to make a team consisting of real-life players and sports teams.
  • Online fantasy gaming needs to restrict the selection of players by choosing players from both teams.
  • No player can change his/her team after the real-life match has started.
  • The player needs to carefully select captain and vice-captain, while former x2 the points and latter x1.5 respectively.

The court finally observed that it needs prior knowledge of the player’s performance, statistics, drafting skills to make a team. Like, horse racing in which factors like fitness, skill and speed of the horse are some of the main factors to place a bet. Similarly, in fantasy sports, prior knowledge of a player makes it inclined towards ‘games of mere skill’ under PGA and didn’t constitute gambling. Consequently, the Court also recognised the offering of fantasy sports games as a legitimate business activity protected under Article 19(1)(g) of the Indian Constitution.[14]

Conclusion

The above discussion highlights how online fantasy games are ‘predominantly skilled’ games as they depend on the skills of the player. However, the gameplay of every fantasy sport is ought to be analysed on a case-to-case basis by the aforementioned principles.

Perhaps, fantasy gaming would have many other benefits apart from those stated in the findings of the Report of the Law Commission. First, as fantasy sports are already in play, prohibiting them will drive it further underground. Secondly, it will exclude bookies from the market and remove black money from the country by promoting fantasy sports. Third, it will become an important source of revenue if allowed and regulated by every state. Finally, an evident additional advantage is the growth of employment. Therefore, I propose that online fantasy gaming should be permitted as the result majorly depends upon the skill and not on chance.



[1] Prithvi Singh, How fantasy gaming is booming in India, Deccan Chronicle, (April. 12, 2019), https://www.deccanchronicle.com/technology/in-other-news/120419/how-fantasy-gaming-is-booming-in-india.html.

[2] Soumitra Bose, After Rummy, IPL 2020 Title Sponsors Dream 11 Face Fresh Challenge In Supreme Court, Outlook (September. 04, 2020), https://www.outlookindia.com/website/story/sports-news-ipl-2020-title-sponsors-dream11-face-fresh-challenge-in-supreme-court/359834.

[3] Chris Isidore, Fantasy sports: What is it, anyway?, CNN Money (October. 06, 2015), https://money.cnn.com/2015/10/06/news/companies/fantasy-sports-101/index.html.

[4] Las Vegas Hacienda, Inc. v. Gibson, 359 P.2d 85, 87 (Nev. 1961).

[5] Humphrey v. Viacom, 2007 BL 38423 (D.N.J. 2007).

[6] FanDuel v. Schneiderman, N.Y. Sup. Ct., 161691/2015.

[7] Deloitte, Skill Gaming in India The changing landscape, 5, (2018), https://www2.deloitte.com/content/dam/Deloitte/in/Documents/risk/in-risk-SkillGamingSurvey-noexp.pdf.

[8] The Public Gambling Act, 1867, §12.

[9] The State of Bombay v. R.M.D. Chamarbaugwala, 1957 AIR 699.

[10] Law Commission of India, Legal Framework: Gambling and Sports Betting Including in Cricket in India, Report No.276, 22, (July 2018), https://lawcommissionofindia.nic.in/reports/Report276.pdf.

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

[12] K.R. Lakshmanan v. State of Tamil Nadu, 1996 AIR 1153.

[13] Shri Varun Gumber v. Union Territory of Chandigarh & Ors., CWP No. 7559 of 2017.

[14] Akshat Agarwal and Vivan Sharan, Fantasy sports like Dream11 are a good candidate for self-regulation, The Print, (November. 02, 2020), https://theprint.in/opinion/fantasy-sports-like-dream11-is-a-good-candidate-for-self-regulation/534104/.

IMPORTANT – Opinions expressed in this article are the sole responsibility of the author and do not necessarily reflect the views of IJOSLCA.

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