Bombay High Court Rejects PIL Against Fantasy League

Author – Neha Agarwal (Banasthali Vidyapith, Rajasthan)

Bombay High Court in case of  Gurdeep Singh Sachar v. Union of India and ors, has noted that Dream 11, a fantasy sports platform is a game of skill and not a game of chance hence does not qualify as gambling.

In the present case, petitioner filed PIL seeking directions to initiate criminal prosecution against the respondent No.3- a Company named “Dream 11 Fantasy Pvt. Ltd.”, firstly for allegedly conducting illegal operations of gambling/betting/wagering in the guise of Online Fanstasy Sports Gaming, which as per the petitioner shall attract penal provisions of Public Gambling Act, 1867, and secondly for alleged evasion of Goods & Service Tax (GST) payable by it by violating the provisions of Goods and Service Tax Act and the Rule 31A of CGST Rules, 2018.

Despite this admitted position, the petitioner effectively seeks to reopen not only the issue decided therein, but also seeks to reopen a judgment of 3 Judges Bench of the Hon’ble Supreme Court in K. R. Lakshmanan v. State of Tamil Nadu [AIR 1996 SC 1153] which was relied upon by the Punjab and Haryana High Court to hold that since success in Dream 11’s fantasy sports basically arises out of user’s exercise of superior knowledge, judgment and attention, it is a game of skill and not a game of chance.

According to the petitioner these fantasy games are nothing but means to lure people to spend their money for quick earning by taking a chance, and most of them end up losing their money in the process, which is thus gambling/betting/wagering, being different forms of “gambling”.

A fantasy game of this nature is merely a game of chance or luck, which is totally dependent upon the luck of a player on a particular day. Upon entering in various contests and putting alleging bet money in them, the player receives a tax invoice in which tax is being charged only on the amount received and retained by Dream 11 towards platform fee say 20%, and not on the entire money which is put a stake by the player. For the balance 80% amount only “acknowledgement” is given. Admittedly, this “acknowledgement” amount collected from each player is pooled in as Escrow Account and their contribution ultimately gets distributed amongst the players themselves as prize money immediately upon conclusion of game, as a result of which, some players get more than their contribution, and some lose money, petitioner argued.

After perusing through the contents of the game itself and examining the submissions as well as after  perusing the records and considering the arguments from both sides, the Bombay High Court headed by Justice Ranjit V. More and Justice Bharati Dangre  noted that : “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 petitioner claims that the result would depend largely on extraneous factors such as, who amongst the players actually play better in the real game on a particular day, which according to the petitioner would be a matter of chance, howsoever skilful a participant player in the online fantasy game may be. The petitioner has lost sight of the fact that the result of the fantasy game contest on the platform of respondent No.3, is not at all dependent on winning or losing of any particular team in the real-world game. Thus, no betting or gambling is involved in their fantasy games. Their result is not dependent upon winning or losing of any particular team in real world on any given day.”

Moreover, since the Supreme Court has already covered the issue in a judgement and the same has been relied upon by the Punjab and Haryana High Court, the bench held that the activities of the said fantasy league do not amount to ‘gambling’ or ‘betting’ or ‘wagering’ even if the definition contained in Finance Act, 1994 is taken into consideration.

Thus, the issue of GST evasion was also answered in the negative since Dream 11 does not come under gambling. Court said-

It can be seen that success in Dream 11’s fantasy sports depends upon user’s exercise of skill based on superior knowledge, judgment and attention, and the result thereof is not dependent on the winning or losing of a particular team in the real-world game on any particular day. It is undoubtedly a game of skill and not a game of chance.

Hence, the PIL was dismissed by the court.

How useful was this post?

Click on a star to rate it!

Average rating / 5. Vote count:

We are sorry that this post was not useful for you!

Let us improve this post!

Leave a Reply

Your email address will not be published. Required fields are marked *