Legality


Here, we have discussed the legality of the fantasy cricket league in India. The discussion and legality check have been divided into two parts. In the first part we see what is the legality of fantasy sports in India and whether legality extends to the game of fantasy cricket? In the second party, we see whether it is prohibited in any part of India?

Part 1

In the light of the ruling of Punjab and Haryana High Court in the case of Varun Gumber vs. Union Territory of Chandigarh1 and various other precedent it is legal to offer and play paid fantasy sports games in most Indian states, with the only relevant criterion being that the particular fantasy sports game qualifies as a ‘game of skill’. Furthermore, Fantasy sports does not fall under the purview of betting and gambling as it is based on the skill of the participants to determine the results and thus, do not rely merely on luck or chance.

The Public Gambling Act, 1867 and Prize Competition Act, 1955 are the law regulating gaming in India,

Section 122 states that;

“Act not to apply to certain games. Nothing in the foregoing provisions of this Act contained shall be held to apply to any game of mere skill wherever played.”

However, the Public Gambling Act has not specifically defined as to what game shall constitute game of “mere skill”. The interpretation of the word “mere skill” was given by the Supreme Court in the case of State of Bombay vs. R.M.D. Chamarbaugwala3. The court said that the game which includes preponderance of skill and in case there is no element of chance then in such circumstances it would qualify as a game of “mere skill.” While the Public gambling act effectively prohibits organized gambling in India, it creates a distinction between betting on ‘games of chance’ and ‘games of skill’.

In the Supreme Court judgement of Andhra Pradesh vs. K. Satyanarayan4 and Dr. K.R Lakshman vs. State of Tamil Nadu5, the court addressed the question so as to what would qualify as game of skill or game of chance, In both these cases and across judicial precedents concerned with gaming, the courts have recognized that no game is a game of pure skill alone and almost all games involve an element, albeit infinitesimal, of chance. In such circumstances, Indian courts have by and large adopted the ‘dominant factor test’, or ‘predominance test’ which requires assessment and determination of whether chance or skill “is the dominating factor in determining the result of the game.

As per the Seventh Schedule to the Constitution of India (Entries 34 and 62 of List II), the state governments have been authorized to make laws on betting and gambling. Therefore, where a state legislation on gambling exists, it prevails over the Public Gambling Act. Accordingly, in addition to the Public Gambling Act, a number of states in India have enacted legislation to govern gambling and gaming within these states. These state legislations are mostly in consonance with the Public Gambling Act, and similarly exempt games where the outcome is predominantly based on skill.

Sikkim Legislative Assembly through vide notification dated 2008 introduced Sikkim Online Gaming (Regulation) Act 2008 (“Sikkim Gambling Law”) with the dual objects of controlling and regulating online gaming through electronic or non-electronic formats, and imposing a tax on such games in the State of Sikkim and Nagaland Legislative Assembly through vide notification introduced a licensed regime for skill game under Nagaland Prohibition of Gambling and Regularization of Online Games of Skill Act, 2015 (Nagaland Gaming Legislation). Furthermore, state of Telangana has also amended its previous legislation and the Telangana Gaming Legislation (Amendment) Ordinance 2017 is now applicable to Telangana which inter alia, expands the scope of offences to apply to the online medium as well.

Additionally, Indian Federation of Sports Gaming (IFSG) formed in 2017 is India’s first and only Sports Gaming self-regulatory industry body formed to protect consumer interest and create standardized best practices in the Sports Gaming industry.

The Sports Gaming industry comprises of any company that operates online sports-based Games of Skill (which may include e-sports, Fantasy Sports and casual sports games). IFSG aims to create a thriving ecosystem for users & operators by laying guidelines for a common set of practices, setting standards of operation and creating a regulatory framework to protect user and operator interests.

Further, the game of cricket fantasy in India is legal as it involves “game of skills” under Section of 12 of Public Gambling Act,6 and therefore it would not come under the purview of betting or gambling.

Nagaland through notification introduced a licensed regime for skill game under Nagaland Prohibition of Gambling and Regularization of Online Games of Skill Act, 2015 (Nagaland Gaming Legislation).

Section 2 states that;

“The games of skill have been allowed by the Bill/Act. These include all such games where there is preponderance of skill over chance, including where the skill relates to strategizing the manner of placing wagers or placing bets or where the skill lies in team selection or selection of virtual stocks based on analysis or where the skill relates to the manner in which the moves are made, whether through deployment of physical or mental skill and acumen.”

The abovementioned legislation expressly recognizes, inter alia, “virtual sport fantasy league games” and “virtual team selection games” as skill games. However, these games should satisfy the skill preponderance test that has been specified in the definition of the “Games of Skill” of the Nagaland Gaming Legislation.

Further the Act has specifically included the game of fantasy cricket under the ambit of “game of skill.”

“ games of skill specifically mentioned are “Chess, Sudoku, Quizzes, Binary Options, Bridge, Poker, Rummy, Nap, Spades, Auction, Solitaire, virtual Golf, virtual racing games including virtual horse racing, virtual car racing etc.; virtual Sports including virtual Soccer, virtual Cricket, virtual Archery, virtual snooker/bridge/pool, virtual fighting, virtual wrestling, virtual boxing, virtual combat games, virtual adventure games, virtual mystery and detective games, virtual stock/monopoly games, virtual team selection games, virtual sport fantasy league games.”

The erstwhile Act, also talks about the territorial applicability of the Act,

“The Bill/Act applies to any territory in India in which “games of skill” are permitted and are recognized as being exempt from the ambit of “gambling”

This means the licensee can offer their services to the states and union territories where games of skills are permitted. Hence, the abovementioned act has the applicability over other states too except the prohibited states of Assam, Telangana and Odisha.

Punjab and Haryana court in the case of Varun Gumber vs. Union Territory of Chandigarh7, The plaintiff in this matter was registered as a player on the platform Dream11.com, which was operated by the respondent company, Dream11 Fantasy Private Limited (“Dream11”). He lost while playing fantasy sports games tournaments offered on Dream11.com. The plaintiff moved the P&H High Court alleging that fantasy sports was not based on skill and that Dream11 was carrying on business covered within the definition of ‘gambling’ under the gambling legislation applicable to the state of Punjab. To which the court held that in case of fantasy cricket there is a requirement of considerable skill in “drafting” team, element of skill pre-dominantly requiring exercise of superior knowledge, judgement, attention, adroitness, training to exercise knowledge, judgement and skill. Where there is an application of skill in the game it stands exempted from the definition of betting and gambling since they do not rely on luck or chance to win, the result depends on the relative knowledge , training , experience of the participants and hence it would not fall under the regulation prohibiting gambling.

Thus, in the view of judicial precedent, game of fantasy cricket is legal in India. The order of the P&H High Court in the Varun Gumber case was referred to the Supreme Court through a Special Leave Petition. However, the petition was dismissed in the Supreme Court. This means the P&H High Court’s ruling stands and will have significant persuasive value in High Courts and lower courts that are tasked with deliberating on and evaluating similar matters across the country. The Supreme Court gave its in-principal approval to the legality of fantasy cricket in India.

Part 2

Fantasy cricket is prohibited in the States of Andhra Pradesh, Assam, Orissa and Telangana. It is also prohibited for the residents of the State of Sikkim.

Section 3 sub clause 1 of Telangana Gaming (Amendment) Ordinance, 2017 states that;

“Any person who opens, keeps, operates, or uses or permits to be used any common gaming house or online gaming or conducts or assists in conducting the business of any common gaming house or advances or furnishes money for gaming therein, shall be punishable”

The abovementioned act, specifically imposes prohibition on both providing services and using of online gaming services.

Section 2 (b) of Orissa Prevention of Gambling Act 1955 states that

“Any play or game for money or other stake and includes betting and wagering and other act, game and contrivance by which a person intentionally exposes money or things of value to the risk or hazard of loss by chance”

Unlike Telangana, there seems to be ambiguity regarding the prohibition of online gaming, as the Act does not specifically gives exception to the game of skills. It puts a blanket ban on all the game in which a person stakes money. The definition given in the Act includes staking money on all games and sports within its ambit with creating any exception for games involving intellect and skill this means that it is illegal to play such games publicly and along with it is also illegal to conduct any business venture allowing participants to play such skill game for stakes.

Similarly, The Assam Game and Betting Act 1970, does not permit “staking of money or money’s worth on the happening or determination of an unascertained event, thing or contingency for or in relation to any game or sport etc.