Game of ‘Skill’ vis-a-vis Game of ‘Chance’ with special reference to Online Fantasy Sports/Games

Know Thy game

Dream11 is a platform for online fantasy sports games and offers fantasy cricket, fantasy kabaddi and fantasy football games since about 2012 in partnership with reputed websites and social media platforms, with a wide user base

Introduction

A Division Bench of Indrajit Mahanty CJ, and Ashok Kumar Gaur J., recently dismissed a Public Interest Litigation bearing D.B. Civil Writ Petition No. 6653/2019 decided on 14.02.2020 in the matter titled, “Chandresh Sankhla and State of Rajasthan & Ors. alleging the online game “Dream 11” of committing offence of betting and gambling. The Petitioner prayed that suitable orders be issued to the respondents to stop the illegal game of gambling and betting, book a criminal case against these respondents for abetting the game of gambling and betting and make necessary arrangements so that such organized crime is not committed in this country by these respondents in any manner whatsoever.

Facts

The grievance raised in the petition is in respect of the online game known as “Dream 11” and the said online game is alleged to be betting of the cricket team and amounting to gambling. The petitioner has submitted that the public in general are cheated in the name of “Dream 11” game and people become a culprit of gambling and betting without having the proper knowledge of the law. The petitioner has submitted that by permitting “Dream 11” game to be played, the respondents are committing offence of gambling and betting

The specific game in question has been previously discussed by the Punjab and Haryana High Court and Bombay High Court and the legality of the game has been upheld primarily under the exemption of Section 12 of the Public Gambling Act and similar state acts. Section 12[1] of the Act provides an exception for “any game of mere skill wherever played”. In other words, “any game of mere skill” is outside the purview of the Acts.

The three acts dealing with the three states are as follows:-

   
Maharashtra Bombay Prevention of Gambling Act, 1887
Punjab The Punjab Public Gambling Act, 1867
Rajasthan Rajasthan Public Gambling Ordinance, 1949

Relevant Cases Referred
Varun Gumber v. Union Territory of Chandigarh & Ors

The petitioner created an account with the Respondent and deposited Rs. 50,000/- to play league games. During the next 2 days, the Petitioner used the money to play the league games from his account and eventually lost the money. Thus, he was ultimately left with a balance of only Rs. 3 out of Rs. 50,000/- in a short span of 2 days. The petitioner claimed that upon losing the money, he realized that the nature of the activities offered on the said website was not based on any skill, but was purely a game of chance and thus they clearly amount to gambling prohibited under the Public Gambling Act, 1867 (“Act”).

The Respondent, on the other hand contended that the principle reason for the failure of the Petitioner to achieve success the Respondent’s fantasy sports was lack of adequate skills. The Respondent further contended that the business of the Respondent was within the purview of Section 12 of the Act which states that the act doesn’t apply to ‘mere skill’ based games. In support of this contention, the Respondent submitted that in any fantasy sports game offered by them is a game which occurs over a predetermined number of rounds (which may extend from a single match/ sporting event to an entire league or series) in which participating users select, build and act as managers of their virtual teams (constituted of real players or teams) that complete against virtual teams of other users, with results tabulated based on statistics, scores, achievements and results generated by the real individual sportspersons or teams in certain designated professional sporting events. The winner of such fantasy sports game is the participant whose virtual team accumulates the greatest number of points across the round(s) of the game. The Respondent inter-alia also contended that there is an inherent requirement of material and considerable skills by the user in ‘drafting’ of a virtual team and ‘playing’ fantasy sports game and which are determinative factors in the result of the game and winning outcomes thereby. The Respondent further submits that they expressly encourage new users who may be unfamiliar with the Respondent’s fantasy sports game or unsure of their cricket knowledge to learn the Fantasy Cricket game by visiting the Dream11 ‘Help’ section, and further encourage them to participate in ‘practice games’ offered by the Respondent through the Platform, which are free-to-play. Through these measures, the Respondent actively supports its users in their endeavour to train themselves and exercise their knowledge, judgment and skill to the best of their abilities in the course of participating in any fantasy sports games offered by the Respondent or any other service provider.

The Ld. Judge has discussed the judgment in the matter of K.R. Lakshmanan v State of Tamil Nadu (AIR 1996 SC 1153) in detail wherein it has been observed that (i) the competition where success depends on substantial degree of skills is not gambling and (ii) despite there being element of chance, if a game is preponderantly a game of skill, it would nevertheless be a game of “mere skill.” In view of the aforesaid, the Ld. Judge observed that the Respondent’ s website and success in its fantasy sports basically arises out of user’s exercise of his superior knowledge, judgment and attention. It was further observed that the element of skill predominantly influences the outcome of the fantasy games on the Respondent’s website than any other incidents therefore accordingly held that any sports game which constitutes the game of “mere skill” does not fall within the activity of gambling for the invocation of Act.

The Punjab and Haryana High Court decided: “The respondent company’s website and success in Dream 11’s fantasy sports basically arise out of user’s 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.”

Accordingly, the writ petition was dismissed.

Gurdeep Singh Sachar v. Union of India

The Bombay High Court had stated: “Only if the result of the game/contest is determined merely by chance or accident, any money put on a stake with the 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 the involvement of substantial skill.

Conclusion

The Court that Dream 11 didn’t have any element of betting/gambling and the said issue was no more res integra in view of the pronouncements by the Punjab and Haryana High Court and Bombay High Court and as the SLPs on the issue have also been dismissed including the clarifications application.

However, the Apex Court has also observed that the scope of review petition which was filed in the Bombay High Court was only with respect to GST and not to re-visit the issue as to whether gambling is or is not involved.

Footnote:

[1] §12. Act not to apply to certain games: – Nothing in the foregoing provisions of this Act contained shall be held to apply to any games of mere skill wherever played.

Author:
Abhimanyu Chopra, Senior Associate

Date: March 5, 2020