19 Jun 2019 7:34 AM GMT
The Bombay High Court has held that Dream 11, a fantasy sports platform is a game of skill and not a game of chance hence does not qualify as gambling. The court dismissed a PIL filed by an advocate Gurdeep Singh Sachar, who sought directions to initiate criminal action against Dream 11 for allegedly conducting illegal operations of gambling/betting/wagering in the guise of Online Fanstasy...
The Bombay High Court has held that Dream 11, a fantasy sports platform is a game of skill and not a game of chance hence does not qualify as gambling. The court dismissed a PIL filed by an advocate Gurdeep Singh Sachar, who sought directions to initiate criminal action against Dream 11 for allegedly conducting illegal operations of gambling/betting/wagering in the guise of Online Fanstasy Sports Gaming, and for evasion of GST.
A division bench of Justices Ranjit More and Bharati Dangre found that the petitioner's intention to re-open issues already decided by a three-judge bench of the Supreme Court in KR Lakshmanan v. State of Tamil Nadu was wholly misconceived. The said judgement was relied upon by the Punjab and Haryana High Court.
Apex Court had concluded in the judgement that 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, petition argued.
Senior Advocate Vikram Nankani appeared on behalf of respondent Dream 11 and Sujay Kantawala appeared on behalf of the petitioner.
Nankani submitted that the Punjab and Haryana High Court categorically held that success in Dream 11's Fantasy Sports basically arises out of user exercise of superior knowledge, judgment and attention thus as per their skill; and held that they have protection guaranteed under Article 19(1)(g) of the Constitution of India.
An SLP against this judgment of Punjab and Haryana High Court was also dismissed by the Supreme Court in an order dated September 15, 2017. 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 KR Lakshmanan v. State of Tamil Nadu which was relied upon by the Punjab and Haryana High Court, Nankani argued.
After perusing through the contents of the game itself and examining the submissions, Court noted-
"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."
The PIL was dismissed.
Click here to download the judgment