Introduction:
We all know that betting is an illegal activity in India. Dream11, a fantasy sports platform based in India that allows users to play fantasy cricket, hockey, football, kabaddi and basketball. We always feel like in substance, there’s no difference between contests entered in Dream11 and betting due to following things:
On the basis of distinguishing features mentioned in ‘Difference between Betting and Dream11’, Dream11 is considered as a game of skill and therefore exempt from provisions of Public Gambling Act, 1867 and hence a legitimate (legal) activity as per Constitution of India; Dream11 is a founding member of FIFS (Federation of Indian Fantasy Sports). The ruling had come on a Public Interest Litigation (PIL) which alleged that Dream11 was involved in “illegal betting and gambling activities.” Indian Premier League (IPL) official sponsors Dream11. Bombay High Court has ruled that the fantasy gaming platform Dream11 is a game of skill and does not involve betting or gambling. The court has also disregarded the allegations of tax evasion. The Punjab & Haryana High Court had upheld that Dream11 reasoned that games of “mere skill” do not fall within gambling and betting, and that success in Dream11 comes from a “user’s. Dream11 is an Indian fantasy sports platform that allows users to play fantasy cricket, hockey, football, kabaddi, and basketball. 4 5 In April 2019, Dream11 became the first Indian gaming company to enter the ' Unicorn Club '.
1. Pooling of Money from various persons
2. Calculation of rewards based on amounts received / proposed to be received and is based on performance of some other player/s
3.Reward is based on happening and non-happening of an event (but is actually not, which is elaborated below)
For above reasons, we believe that Dream11 is a kind of betting activity but the same isn’t true, here’s why.
Difference between Betting and Dream11:
Betting involves putting money and getting rewarded purely based on happening / non-happening of an event which hardly requires any skill. On the other side, Dream11 (which is a fantasy game) is a game of skill and involves selection of a distinct team players at the choice of the participant.
* Selection of a player into team will require analysis and judgement with respect to his past performance, pitch conditions and weather conditions and ability to perform against opponent team etc.
* Number of players in a team will consist of number of players as playing in real-life sports team (Like 11 for Cricket / Football, 7 in Kabaddi etc)
* There’s a limit as to maximum and minimum number of players from a team (for example, in a cricket contest, a participant can have maximum 7 players from a particular team and a team should have atleast one wicket keeper etc) which distinguishes it from betting
* Duration of all contests are atleast one full sports match (unlike in betting, where it can be done even for a ball / over / player etc)
* No team changes are allowed by participants after start of the match and deadline for updating / participating in a contest which is usually before start of match
* Credits for including a player in team are same for every one (not differentiated to the advantage / disadvantage of any participant) and no change in credits allotted to any participant (100 credits per team to be created)
Gambling Dream11 Prediction
* Competition among participants in a contest can be tracked on a real time basis and every player is allowed to view / download details of all teams in a contest which provides utmost transparency
Legal Compliance of Dream11:
- On the basis of distinguishing features mentioned in ‘Difference between Betting and Dream11’, Dream11 is considered as a game of skill and therefore exempt from provisions of Public Gambling Act, 1867 and hence a legitimate (legal) activity as per Constitution of India
- Dream11 is a founding member of FIFS (Federation of Indian Fantasy Sports)
- On winnings above Rs 10,000, TDS at the rate of 30% is being deducted under 194-B of Income Tax Act, 1961
- GST at the rate of 18% is being paid by Dream11 on supplies made by it (considering them as other online services)
Conclusion:
After analysis of above mentioned facts and compliances, it may be concluded that Dream11 is a fantasy game and not illegal as incase of betting / gambling. The same has been ordered by High Courts of various states.
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A division bench of the Rajasthan High Court in an order given last week, reiterated the earlier pronouncements of the Punjab & Haryana and Bombay High Courts that ruled fantasy sports to be games of skill and consequently falling outside the ambit of gambling/betting legislations.
The division bench comprising of Chief Justice Indrajit Mohanty and Justice Ashok Kumar Gaur after hearing arguments over several hearings and giving opportunity to the respondents to file replies and the petitioner to file a rejoinder, pronounced the order on 14th February, 2020 in the Public Interest Litigation (PIL) filed by one Chandresh Sankla, a resident of Ajmer.
The petitioner in his PIL claimed that online fantasy sports website Dream11 was involved in betting activities and gambling activities and asked that the state government stop such activities, initiate criminal proceedings against the company and ensure that the crimes committed by Dream11 are not carried out anywhere across India.
Sankla in his petition impleaded the Home Secretary, Government of Rajasthan, State of Rajasthan as well as Dream11 founders Harsh Jain and Bhavit Sheth as respondents.
Justice Gaur, while speaking for the court in Chandresh Sankla v. State of Rajasthan & Others reproduced the relevant portion of the 2017 order of the Punjab & Haryana High Court Varun Gumber v. Union Territory of Chandigarh & Others wherein it was decided: “The respondent company’s website and success in Dream 11’s fantasy sports basically arises out of users exercise, superior knowledge, judgment and attention…. Equally so, before I conclude, I must express that gambling is not a trade and thus, is not protected by Article 19(1)(g) of Constitution of India and thus, the fantasy games of the respondent-company cannot said to be falling within the gambling activities as the same involves the substantial skills which is nothing but is a business activity”
The Court also extracted the relevant portion of the Bombay High Court’s judgment in Gurdeep Singh Sachar v. Union of India & Others which reiterated the conclusion of fantasy sports involving substantial degree of skill: “Only if the result of the game/contest is determined merely by chance or accident, any money put on stake with consciousness of risk and hope to gain, would be ‘gambling’ or ‘betting’. There is no merit in the submission that the result of their fantasy game/contest shall be considered as merely by chance or accident notwithstanding involvement of substantial skill.”
The Rajasthan High Court in its judgment also noted that both Gumber’s and Sachar’s Special Leave Petitions (SLPs) in the Supreme Court where dismissed.
Gambling Dream
It further noted that the Supreme Court while recently dismissing Sachar’s SLP as well as subsequent clarification application had noted that the issue of whether gambling is or is not involved in the Dream11 matter cannot be revisited by the Bombay High Court while hearing the review petition filed by the union government and that only the GST issue can be re-heard by the Bombay High Court.
Dream11 Gambling Or Not
The court ultimately while ultimately dismissing the petition concluded that ‘the issue of treating the game “Dream 11” as having any element of betting/gambling is no more res integra in view of the pronouncements by the Punjab and Haryana High Court and Bombay High Court and further the SLPs have also been dismissed against the orders of these High Courts.’