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In a landmark judgment, the High Court of Punjab and Haryana in
the case of Shri Varun Gumber v. Union Territory of Chandigarh
and others1 held that fantasy sports games that
require considerable skill, judgment and discretion are 'games
of skill' and do not amount to gambling. Further, an appeal
against this judgment was subsequently dismissed by the Supreme
Court.
Facts of the case in brief:
Mr. Varun Gumber (hereinafter
referred to as the 'Petitioner') transferred an amount of
INR 50,000 (USD 699 approx.) by his credit card to his own account
opened on the Dream 11 website
https://fantasycricket.dream11.com.in for participating in various
leagues created on the said website.
The Petitioner created a virtual team
of a Cricket match between Ireland and Afghanistan by choosing 11
out of the total players who were to play for the two
countries.
After forming a virtual team of 11
players as per his own selection, knowledge and judgment, the
Petitioner joined various leagues selected by him and from the
available deposit of INR 50,000 (USD 699 approx.) the Petitioner
used INR 24,000 (USD 335 approx.) for playing in the leagues which
he lost entirely at the end of the Cricket match.
Further, the Petitioner made a
similar virtual team for a football match between Manchester City
and Middlesbrough wherein he used the rest of the deposit amount
[INR 26,000 (USD 363 approx.)] to play in the leagues of his choice
and similarly lost the rest of the deposit amount.
The Petitioner then filed the
petition claiming that he has been a victim of illegal
gambling.
Salient points from the High Court's Judgment:
Playing of fantasy sports game by any
participant/ user involves making a virtual team by him which would
certainly require a considerable skill, judgment and
discretion.
The participant/ user has to assess
the relative worth of each athlete/ sportsperson as against all
athletes/ sportspersons available for selection.
The participant/ user is required to
study the rules and regulations as well as the strengths and
weaknesses of athletes/ sportspersons.
The success in Dream 11's fantasy
sports basically arises out of the users exercising superior
knowledge, judgment and attention.
There is an element of skill and its
predominant influence on the outcome of the Dream11 fantasy
game.
Fantasy sports games will not fall
within the activity of gambling for the invocation of the Public
Gambling Act, 1867, and thus, the Respondent company is exempt from
the application of provisions, including the penal provisions,
under the Public Gambling Act, 1867.
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 be said to
be falling within the gambling activities as the same involves the
substantial skills which is nothing but is a business activity with
due registration and paying the service tax and income tax. Thus,
they have protection granted by Article 19 (1)(g) of Constitution
of India.
Appeal against the High Court decision:
An appeal against the Punjab & Haryana High Court's
decision was filed in respect of which the Supreme Court passed an
order dismissing the appeal on September 15, 2017.2
Remarks:
It is pertinent to note that dismissal of appeal by the Supreme
Court means that the format of fantasy sports game evaluated and
commented upon by the High Court of Punjab and Haryana holds good
in law.
However, this does not mean that all the
fantasy games ever developed would be games of skill. Further, it
is worth mentioning that despite the dismissal of this appeal, the
Supreme Court can in future take up the issue of whether a
particular fantasy sports game is a 'games of skill' or
not.
Footnotes
1. Shri Varun Gumber v. Union Territory of Chandigarh and
others, CWP No.7559 of 2017 decided on April 18, 2017.
2. Diary No(s). 27511/2017 (Arising out of impugned final
judgment and order dated 18-04-2017 in CWP No. 7559/2017 passed by
the High Court Of Punjab & Haryana At Chandigarh).
For further information please contact at S.S Rana &
Co. email: info@ssrana.in or
call at (+91- 11 4012 3000). Our website can be accessed at
www.ssrana.in
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