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Supreme Court: Challenge against fantasy sports platform Dream11 fails

Supreme Court of India
Credit: Aditi Agrawal

The apex court’s order follows several legal victories secured by real money gaming services like Dream11 even as states like Karnataka have shown interest in legislatively addressing the issue.

The Supreme Court in an order dated July 30 dismissed a Special Leave Petition (SLP) that alleged that Dream11’s fantasy sports app amounted to gambling, wagering, and betting and is not a game of skill. A Rohinton Fali Nariman- and BR Gavai-led bench ruled that the question of whether Dream11 and other fantasy sports stakes-based apps can be termed as betting and gambling was already settled. “The court has once again reaffirmed the judgements passed by the Punjab & Haryana High Court and the Bombay High Court, and has upheld the judgment passed by Hon’ble Rajasthan High Court, where the legality of the online fantasy sports format as offered by Dream11 as a ‘Game of Skill’ was sustained. Thus the legality of Dream11’s online fantasy sports format as protected by the Constitution of India, is now final by law and in fact,” Dream11 said in a press statement.

This matter is no longer res integra [a fresh matter that has not yet been addressed] as Special Leave Petitions have come up from the Punjab & Haryana High Court and have been dismissed by this Court as early as on 15.06.2017. Also, from the Bombay High Court, Special Leave Petitions have been dismissed on 04.10.2019 and 13.12.2019. — July 30 Supreme Court judgement

Why it matters? Real money gaming operators’ legal victories are so deeply established that this Supreme Court ruling was just two pages long. The fact remains that combined with strict legal standards for what can constitute gambling, and decades-long jurisprudence restricting what counts as gambling (see below), these services are bound to proliferate, especially as the central government’s role is limited by virtue of gambling and betting being a state subject.

Another case dismissed on similar grounds

A similar case was appealed up from the Rajasthan High Court last year. The high court had declined to entertain it, stating that in the light of orders passed by Punjab & Haryana High Court and Bombay High Court, the question of whether services like Dream11 amounted to gambling had already been decided in the fantasy sports service’s favour.

Gopal Jain, counsel for Dream11 and Supreme Court advocate, said, “Simply put, the Fantasy Sports formats which are in line with the analysis of the Punjab & Haryana High Court are games of skill and are legal formats no more open to scrutiny.”

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Mahesh Agarwal, Advocate on Record, Supreme Court of India, said “The Supreme Court has repeated its position and cleared the air that Dream11 Fantasy Sports constitutes a game of ‘skill’ and is not ‘gambling’. By re-affirming its earlier orders on the fantasy sports platform offered by Dream11, it has yet again given its final stamp of approval on the legality of the platform.

Online gambling services solidify legal position

Under the Indian constitution’s State List, states are empowered to regulate gambling and betting. However, over the last few decades, the contours of gambling have been chased into a corner, marked by legal victories for stakes-based game organisers.

It is this legal precedent, that games of stakes that are influenced by skill don’t constitute gambling or betting, that lets fantasy sports apps like Dream11, where well-informed players may have an edge, survive legal and legislative challenges.

How have Dream11 and associated companies protected their interests?

Two ways:

  1. Legal victories: Based on legal victories like the KR Lakshmanan case and the prior 1957 State Of Bombay vs RMD Chamarbaugwala case that established that games that were influenced by skill could not constitute gambling, real money gaming companies have been able to stave off attempts at regulation and judicial intervention.
    • The Rajasthan High Court case referred to by the Supreme Court in the July 30 order fundamentally agreed with the assessment that fantasy sports, which work based on real-life outcomes of actual sports, need skill to predict, and therefore don’t constitute gambling.
    • The Supreme Court has not dismissed appeals against such victories, which include a Punjab & Haryana High Court ruling that made the same observations.
    • Just last week, the Tamil Nadu government’s online gaming ban that outlawed such services was struck down by the Madras High Court, which also agreed with this assessment.
  2. Self-regulatory bodies: While overreaches like Tamil Nadu’s law — which placed a blanket ban on stakes-based gaming that the Madras High Court found unacceptable, even though it had bipartisan support — have been defeated in court, it is not as simple to question the instinct that such players need to be regulated. And this is where self-regulatory bodies come in to assuage policymakers and the judiciary. The Federation of India Fantasy Sports is an industry body touted as a self-regulatory association, and it claims that its members reach 99% of online gaming audiences in India. The Rajasthan High Court even praised the association in the judgement linked above, observing, among other things, that “a bare perusal of the leadership team of FIFS shows that it has eminent persons from the industry as well as ex-members of regulatory bodies, who are tasked with ensuring compliance with the applicable laws”. The All India Gaming Federation is a similar entity and was part of the petitioners who obtained the legal victory in the Madras High Court earlier this week.

States and real money gaming

Different states have different approaches in regulating real money gaming, but they have increasingly shown interest in legislatively addressing the issue.

Andhra Pradesh has banned the practice, while Uttar Pradesh‘s State Law Commission has announced a bill to regulate it. Karnataka is reportedly planning to introduce regulations for online gaming, but has not yet published its draft bill for the purpose. North-Eastern states have in particular created licensing frameworks for real money gaming services or permitted them fully:

  • Nagaland has a licensing system for stakes-based games that require skill.
  • Sikkim updates its gaming laws regularly to address wagering and stakes-based gaming and allows games that depend on player skill.
  • Meghalaya has legalised all wagering and betting.

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