Fantasy sport is an online game that involves selection of and competition among virtual teams for points. These points can be redeemed in prizes, including money. However, when cash for stakes is involved, a fantasy game or sport is required to comply with additional legal compliances.
There is no legal definition for “fantasy sports” in India. Games of chance fall under gambling and are thereby restricted by state gambling laws. Fantasy Sport is classed as a game of skill, rather than chance. The Supreme Court of India has explained skill in terms of “superior knowledge, training, attention, experience and adroitness… although the element of chance necessarily cannot be entirely eliminated”. It is the dominant element, either ‘skill’ or ‘chance’ that determines the character of the game.
However, games involving considerable and substantial degree of skill (mathematically, more than 50%) fall outside the extent of betting laws and consequently are legitimate in India. Courts have examined the game format of Dream11 and have considered its format as ‘game of skill’. Courts have not examined any other fantasy gaming formats and have not offered any views, judgments, or analyses the format of any other fantasy gaming platform. Whether a fantasy sport is a game of chance or a game of skill, legality is based on the modalities of each game.
As there are no set of government regulations, Fantasy industry standards in India are regulated by Federation of Indian Fantasy Sports (FIFS. Self-regularisation norms for the Indian fantasy sports industry is set up by the federation until the government comes out with any standards and laws.
The gambling laws in India are State specific. In most State enactments games of skill are excluded from the application of gambling laws.
When it comes to taxation, as per the Indian rule, 18% GST is applicable on games that are skill-based, like Dream11’s format, and fantasy sports gaming. The court referred to Schedule III of the Central Goods and Services Act, 2017 which states that ‘actionable claims, other than lottery, gambling and betting’ are excluded from the scope of supply.”
To understand it definition of the gambling is reproduced hereinafter:
‘Gambling’ as per most Gambling Legislation is understood to mean “the act of wagering or betting” for money or money’s worth. Gambling under the Gambling Legislations however does typically not include (i) wagering
or betting upon a horse-race/dog-race, when such wagering or betting takes place in certain
circumstances, (ii) games of “mere skill” and (iii) lotteries (which is covered under Lottery Laws).
Online gaming is Legal up to the extent, when there is use of skill which can be said as when the chances to win are not wholly based on probability, The key points from an Indian High Court’s judgment specifically regarding (challenge to this judgment was also dismissed by the Supreme Court of India therefore it attained finality)
The Court, in its ruling, stated that playing the online game involves considerable skill, judgment and discretion and that success on online games arises out of users’ exercise, superior knowledge, judgment and attention
The Court also held that ‘the element of skill’ had a predominant influence on the outcome of the game, which follows the following format:
Participants have to choose a team consisting of at least the same no. of players as playing in a real-life sports team (e.g.11 in cricket/football, 7 in handball, 7 in kabaddi )
All contests are run for at least the duration of one full sports match
No team changes are allowed by participants after the start of the sports match
On this basis, the Court adjudged that playing on constitutes a ‘game of mere skill’, which makes the game exempt from the provisions of the Public Gambling Act, 1867 (PGA).
Finally, the Court held that the online gaming is a legitimate business activity protected under Article 19(1)(g) of the Constitution of India.
You can find more information on the legality of Fantasy Sports in India on the website of the Indian Federation of Sports Gaming (IFSG): http://www.ifsg.in. IFSG is India’s first and only self-regulatory Sports Gaming industry body formed to protect consumer interest and create standardized best practices in the Sports Gaming industry.
Fantasy Cricket launched in India
As a strategy-based game, Fantasy Cricket requires thorough sports knowledge and research skills, meaning the outcome does not depend on luck but on the actual performances on your chosen players on the field.
Till now, many such fantasy sports app or websites are available like Dream 11, Ballebaazi, Fanfight, Playerzpot, Real cricket and many more. Dream 11 is also the first and top in all others. Dream 11 is also the title Sponsor of IPL season 13, starting from 19th September in UAE under Bio secure Bubble. They offer fantasy cricket and fantasy football.
In simple words, this is legal because here you use your knowledge and understanding although there is a luck factor but not in entirety. However, if you are resident of Assam, Odisha, Telangana, Nagaland and Sikkim, you are not legally permitted to play online games for a fee. The laws are different in these Indian states.
Since fantasy sports involve skills, it does not fall in the gambling category of games in India. Other than fantasy sports in India, Indian laws have categorised Rummy, Chess, Carrom, and Wagering on Horse Races as games of skill.