SC Upholds Rajasthan HC’s Verdict On Dream11

The Supreme Court (SC) has recently dismissed an appeal against a judgment of the Rajasthan High Court which ruled that playing on online fantasy sports platform Dream11 is not gambling, because it requires skill. The Apex Court found the issue to be not res integra (unique) as it had ruled on the matter on several prior occasions.

The petitioner had chosen to refer to a ruling of the New York Supreme Court from February 2020, which, in his own words, had found fantasy sport gaming to be "pure gambling". The ruling of the Rajasthan High Court which came in October 2020, held that the outcome of a game on the Dream11 platform depended on the knowledge and skills of the player.

"It can be safely deduced that the result of the fantasy games is not determined merely by chance or accident. The skill of the participant determines the result of the game and has a predominant influence on the outcome of the fantasy game," the High Court had said.

The Rajasthan HC further observed that fantasy game participants choose players from all real teams when making the selection for their virtual team. Thus, the fact whether a particular team wins or loses in a particular match in the real world is immaterial for the outcome of fantasy games.

The High Court also observed that Dream11 games require substantial skills and as such defined them as a "business activity" protected by the Union Constitution, Article 19(1)(g), which maintains the fundamental right "to practice any profession or to carry out any occupation, trade or business".

The SC bench consisting of Justice Rohinton Nariman and Justice Bhushan Ramkrishna Gavai ruled that the issue was no longer res integra (unique) for the court as it had already been the subject matter of several previous judgments.

"This matter is no longer res integra as Special Leave Petitions have come up from the Punjab & Haryana High Court and have been dismissed by this Court as early as on June 15, 2017. Also, from the Bombay High Court, Special Leave Petitions have been dismissed on October 14 and December 13 of 2019," the SC order reasoned.

In 2017, the SC had dismissed a challenge against the ruling of the High Court of Punjab and Haryana on the Varun Gumber vs. U.T. of Chandigarh case. The bench at the Palace of Justice at Chandigarh had observed that it is the element of skill that has a predominant effect on the outcome of the games, because the participant has to exercise considerable skill, judgment and discretion when drafting his or her fantasy team. Thus, the participant's assessment, based on knowledge of each athlete's strengths and weaknesses as of the moment of drafting, determines whether the participant will win or lose the fantasy matches.

In 2019, the Bombay High Court adopted the view of the Punjab and Haryana High Court on the Varun Gumber case when pronouncing its judgment on the Gurdeep Singh Sachar vs. Union of India case. The Bombay HC further noted that winning or losing in online fantasy sport games does not depend on the victories or defeats of any team in the real world and this differentiates it from offline or  online betting on actual sports events. The Supreme Court jointly dismissed challenges to this ruling submitted by Gurdeep Singh Sachar and the Union of India.

Dream11 is the dominant operator in the Indian online fantasy sports segment with a market share of around 90 per cent. The company's multi-billion valuation makes it the nation's first gaming unicorn and besides being the holder of the IPL title sponsorship rights, Dream11 is also the first Indian sports operator to sign high-profile partnerships with top sports leagues such as the NBA and the ISL.

While the Indian gaming industry is awaiting regulation, the consistent practice of the High Courts and of the SC maintaining the inherent skill-based nature of fantasy sports has allowed Dream11 to become the trend setter. The platform's advertising campaigns are often aiming to generate a favorable business climate for the whole fantasy sector, highlighting the fact that gamers need to exercise strategic planning abilities combined with superior knowledge of the sport to be successful.

The illegal status of gambling and betting in physical locations like back alleys and unlicensed wagering dens, combined with the growing penetration of affordable smartphones equipped with cheap mobile data plans, have made Pure Win Sports Betting and other offshore online betting platforms increasingly prominent in India.

The rising disposable incomes, the growing numbers of the nation's middle class, and, more lately, the lockdowns related to the Covid-19 pandemic, have further fueled the trend towards the safety and traceability of online betting options instead of participating in various black market operations for a simple bet on a sports event.

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