How Legal Are India’s Online Fantasy Games?

Fantasy games in India are one of the most flourishing new industries. Image used for representation. 

(Photo: The Quint)

Before India’s Constitution came into force, the Public Gambling Act, 1857 governed gambling in the country. Like other legislations, this was also heavily influenced by the gambling legislations enacted by the Parliament of the United Kingdom.

However, after the enactment of our Constitution, there were different areas that were distributed amongst the Centre and the State to legislate on. Betting and gambling fell under the exclusive domain of the state legislature i.e. only the concerned state legislature is empowered to make laws pertaining to that entry.

So now, as the world gets digitalised, there are new ways that people have found to engage in gambling. One such way has been fantasy sports. The idea behind fantasy sports centers around it being a game of skill as well as a game of chance.

Major fantasy sports online game platforms have started to gain a lot of traction over the past few years and taken the online gaming world by storm. They host plenty of online competitions everyday across different sports where individuals using their skills and insight can form a team of athletes that they think will perform well on the given day. It is through this team that they are given points, and then subsequently cash prizes.

This requirement of skill distinguishes fantasy sports from other illegal gambling activities, as the latter are completely game of pure chance, whereas the former requires a good amount of skill.

Game of Skill or Chance?

Public Gambling Act, 1867, which is the law for the ban of illegal public gambling activities in India provides exemptions under Section 12 to certain games if they require skill, and chance is not the sole determinant in the outcome of the game.

This particular debate between game of chance and game of skill has been the main contention in all the legal challenges concerning the validity of the game.

The line of reasoning that has often been followed asserts that because it’s a game of pure chance, it would amount to gambling and would not allow it to fall under Section 12 of the Public Gambling Act, 1867. The plight of online fantasy games worsened when some of the states like Andhra Pradesh and Telangana decided to ban online gaming and betting platform, even when the same has been held to be a game of skill by different state high courts.

Punjab and Haryana HC explored the aspect of fantasy sports in the case of Varun Gumber, where the court came to the conclusion that success in online fantasy sport games is depended on a participant’s use of skill, superior knowledge, judgment, and application of mind.

Hence, the online fantasy sports games require more than just chance, and test a person’s skill on the various moves they make in the course of the game. The Bombay HC and the Rajasthan HC followed this reasoning as well, when they were faced with a similar question in the cases concerning the validity of Dream 11 and its fantasy sports game.

This reasoning was further set in stone when the Varun Gumber case was referred to the Supreme Court through a Special Leave Petition, and it dismissed it holding that the judgement given by the Punjab and Haryana HC was good law. However despite this, the position regarding fantasy game is far from settled. In an appeal to the Bombay HC judgement of Gurdeep Singh Sachar, the Supreme Court issued notices to all the parties for hearing fresh arguments. This has put the future of fantasy sports games in a flux and the legal position concerning the online fantasy games in a conundrum.

To Advertise or Not to Advertise?

With the growing presence of fantasy sports games in the country, there have been serious questions raised by the courts regarding the advertisements of these games.

Recently, Kerala HC and Madras HC issued notices to Virat Kohli and other celebrities in a plea challenging the involvement of celebrities in online sports advertisement. However, it is to be noted here that the pleas challenged not only the fantasy sports games but also online rummy.

It has been contended that these celebrities are promoting and endorsing unethical immoral online gambling, using their familiarities to promote online gambling.

However, when looking into this, the court should take into consideration that while a particular activity may be immoral, it does not necessarily mean that the same is unlawful.

The court needs to make a distinction between the illegality of the fantasy sports games and promotion of the same through advertisements. Courts when specifically addressing the issue of advertisements, should keep in mind that advertising is not the main cause of people engaging in online gaming, to tackle this there needs to be proper guidelines laid out for their advertisements.

A good step in this direction has been the recent guideline on online gaming advertisements that have been released by the I&B Ministry. Although advisory in nature, these guidelines bring in some much-needed checks and balances required for the regulation of advertisements in this industry. These guidelines make real-money gaming advertisements safer and more responsible for consumers, by placing a duty on online gaming companies to spread awareness regarding the risk involved in these games.

Way Forward for Fantasy Sports in India

With the current regulations in place, the future for the fantasy sports industry in the country looks challenging. Most of the states in the country have gaming legislations in place, which are 50-70 years old, at a time when the internet didn’t even exist. None of these legislations deal with the question of online gaming properly.

It is time that the Parliament amends the archaic Public Gambling Act of 1867 and incorporates regulations for the online gaming industry. The companies falling under this legislation need to be held up to a higher level of responsibility.

There needs to be a significant amount of checks that should be placed on the companies wishing to enter into this industry, so as to make sure that the scope for malpractices and any illegalities is reduced, while at the same time letting the industry flourish. This can be done by putting in place licenses that have to be secured from the government before allowing any kind of money-driven online gaming.

This will serve a three-pronged purpose:

• Firstly, it’ll give the companies securing these licenses more legitimacy.
• Secondly, it’ll help in making sure that the sudden rise in illegal online gaming groups is curbed.
• Thirdly and lastly, it’ll give the government a more streamlined source of revenue in terms of taxes.

(Shivam Singh is a Counsel at the Supreme Court of India and works with Chamber 20A. He has read law at Harvard Law School, Columbia Law School and National Law School of India University. He is grateful to Rohan Tewari, Student of National Law School of India University, for the research assistance.)