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The Fantasy Sports Phenomenon: India’s Take

*Written by Neha Yadav



The Online Fantasy Sports Platform has gained traction in India which has presented ample room for jobs, foreign exchange and gives a boost to country’s economy. It has converted the passive engagement of viewers into active participation. But the thriving industry faces a lot of constraints in India because of the inadequate regulation and the lack of legislations.


Fantasy Sports necessitates the users to draft their own fantasy teams based on the list of players who are scheduled to play real-time sport on that particular day. It prerequisites the use of knowledge, prior experience, attention and skillfulness in drafting the team. In order to validate this, a popular online fantasy sports platform “My 11 circle” has a tagline that stresses using one’s mind to inform the team; it says ‘hai Akal, toh khelo MPL’. After disbursement of an entry fee, the users enter the contest. The overall amount is pooled after deducting a service or administrative fee. The amount gets fractionated according to the rank of the users which is subject to the number of points collected. The performance of the real players taken by the user directly influences the points gathered by them. The users are ranked in conformity with the points gathered by them which are based on their real players' on-field performance.


In India, Fantasy Sports is considered to be valid and therefore all the States but Assam, Nagaland, Sikkim, Andhra Pradesh, Orissa and Telangana have permitted online fantasy sports. These states have stringent rules which control online gaming activities. The States are given powers to make laws regarding Gambling and Betting under Schedule VII, List II, Entry 54 of the Indian Constitution as a result of which we have fragmented laws regarding such activities. Andhra Pradesh was the first state to ban all game which involves real money and includes online gaming activities through Andhra Pradesh Gaming (Amendment) Ordinance, 2002. Furthermore, Sikkim and Nagaland require the companies engaged in fantasy sports to obtain a license from the State Government regarding the same. Orissa has outlawed all forms of gaming activities. Recently, Tamil Nadu passed a new law that prohibits the citizens from engaging in any pay to play contests on any online gaming apps or sites.


As of now, there is no legal definition of fantasy sports or an inclusive list that lays down different sports that come under the purview of fantasy sports in India. But when it comes to the definition of fantasy sports there has been sufficient discussions as well as judicial decisions which considers it as a “game of skill” i.e. a game that involves mathematical ability whereas games that are purely chance-based have absorbed in the meaning of Gambling and Betting. As regards the legitimacy of such platform in India is concerned, only activities that come under ‘game of chance’ are banned in India which includes the foremost activities which needed regulation such as gambling and betting.


To distinguish between ‘game of chance’ and ‘game of skill’, the facts and circumstances of the fantasy sport in question are relevant. The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act, 2015 is the only legislation that defines Game of skill and Game of chance. It defines ‘game of skill’ as a game where there is a preponderance of skill over chance i.e. one uses his skill in team selection and strategy in terms of the manner in which each player/wager is placed. In contrast, a game of skill places preponderance of chance over skill. The presence of even an element of chance deters a game from being a ‘game of skill’. ‘Game of chance’ is illegal in India as it is entirely dependent on luck, one does not have to apply his/her mind to estimate the result and thus the results are often doubtful. It merely is a probability of winning. ‘Game of skill’ in contrast is a game or contest the outcome of which is entirely dependent on one’s judgment, prudence, skill and attention, it is not dependent merely on luck.


Apart from this, a number of judicial precedents decided on the whole fantasy sports controversy. Prior to that, a landmark judgment RMD Chamarbangalla v.UOI[1] distinguished sports from Gambling and betting by lying down some principles. The court held that if the success of the player depends on their skill and the element of chance relies on the skills of the player then it will not come under the purview of betting /wagering. In recent times there have been adequate judgments that dealt with the legality of the famous fantasy sports Dream 11. In Varun Gumber v Union Territory of Chandigarh & Ors[2], the petitioner challenged the legality of Dream 11 by arguing that the platform is chance-based and not skill-based and fell foul to the provisions of the Public Gambling Act, 1867. It was alleged by the petitioner that platforms that use real money come under betting/gambling. But the Punjab & Haryana Court ruled that Dream 11 and other fantasy sports services come under ‘game of skill’. Consequently, the same was upheld in Gurdeep Singh Sachar v. Union of India[3] the court held that Dream 11 depends upon users superior knowledge, judgment and attention. In addition to this, the winning status of the users' fantasy team does not depend on the match outcome of the team actually playing sports on that particular day. In Chandresh Sankhla v. State of Rajasthan[4]wherein the petitioner alleged that Dream 11 is an illegal platform and prayed for criminal proceedings against the same. The Court ruled that the legal position of Dream 11 has been already examined by the Courts in previous decisions and such allegations are frivolous. Thus, fantasy sports have come under the purview of ‘game of skill’ in India which is evident from the consensus among the courts.


But the fact that online fantasy sports companies work on the side of caution cannot be ignored. Fantasy sports remain in the realm of ‘gambling & betting’. There is no law that regulates such platforms which renders it absolutely unclear as to their position. This evident lack of legality of online fantasy sports has been significantly misconceived in addition to the moral and optical concerns that it raises regarding the use of real money gaming. Nowadays, there have been increasing small transactions as low as INR 1. Moreover, only the format of Dream 11 has been examined by the courts. Notwithstanding, that at present there are approximately 59 other fantasy sports platforms in India, which work differently as they all have different formats which account for their divergence. They do not often judge the skill of the user as they do not adhere to the same gaming format. At present, the judgments are mainly based on Dream 11 which does not necessarily place all other fantasy games under the “game of skill” criteria.


NITI Analog has recommended setting up interstate self regulatory body with its own set of rules and regulations provide safe harbor and provisions with defined parameters and mechanisms to determine fantasy sports game. It will promote fan engagement, symbolic relationship with sport, and increasing interest in a wide variety of sport events. Moreover, the 14th edition of the Indian Premiere league has revived regulatory interest. After witnessing a spike in the low volume transactions such as Mobile Premiere League which uses bets for as little as Rs. 1, the National Payments Corporation of India has decided to regulate the same by banning UPI transaction below INR 50.


To sum up everything that has been stated, cricket remains the most popular sport in the country, the Online Fantasy Sports Platform keep the viewers engaged throughout the year and the prospects for such online gaming sports is certainly enormous. But in order to fully regulate such platforms, it is equally important that the Government should form a robust supervisory body that shall issue guidelines to regulate such online gaming sports as well assess the individual game formats to ensure uniformity. The regulatory bodies which govern the sports sector in India such as the BCCI and ICC should join hands with the Ministry of Public Affairs and Youth to develop a sturdy framework that shall govern the Online Fantasy Sports Platform.


*The author is a Law Scholar from National Law Institute University (NLIU), Bhopal


(The image used here is for representational purposes only)




References:

[1] RMD Chamarbangalla v.UOI 1957 AIR 628 [2] Varun Gumber v Union Territory of Chandigarh & Ors CWP No.7559 of 2017 [3] Gurdeep Singh Sachar v. Union of India 2019 75 GST 258 Bombay [4] Chandresh Sankhla v. State of Rajasthan 2020 SCC Online Raj 2(4)