Fantasy sports (also called esports) has caught the attention of sports fan. This is exemplified by 1.1 billion valuation of Dream11, in the latest round of funding. Dream11 - the Tencent-backed fantasy sports startup is the poster child of India’s fantasy gaming ecosystem. The mass penetration of mobile 4G, and cheap data, has popularized the fantasy sports. Dream11 itself has set up a target of 100 million registered users by the end of 2019. With Cricket World Cup to start in less than two months , the numbers do seem achievable with Indian cricket fans finding this new format of sports engaging and entertaining.
Is betting as promoted by Fantasy sports legitimate?
Gambling in India, barring a few States, is an illegal activity and the games which offer an opportunity to gamble are also banned. However, there is a fine distinction between;
a) pure gambling which is a game of chance/luck; and
b) games which involve skill along with a dash of chance/luck which is permitted and has found favour with the Indian courts.
It is widely accepted that no game is a game of pure skill only. Almost all the games involve an element, even though in minimal measures, of chance. In such a situation, the Indian Court/s have adopted “dominant factor test” or “predominant test” which is required to determine whether “skill” or “chance” plays a predominant part in determining the result of the game. It is also seen that the Court/s in India have kept games which are predominantly based on skill out of the purview of the regulatory and penal provision/s
The courts have examined the issue in relation to legality of the card game of Rummy – which was held to be a game of skill - as opposed to the three card game - as the fall of cards would need to be memorized and the building up of rummy requires considerable skill in holding and discarding the cards. Also, ‘Bridge’ was held to be a game of skill.
Further the Supreme Court when examining whether horse racing was a game of skill or chance held it to be a game of skill. The court observed in selecting the horse its fitness needs to be assessed by a person placing a bet or wager.
Coming to the fantasy sports games, and taking Dream11 as an example, it comprises a game which requires the user to compile their own fantasy teams from the list of players scheduled to play live on a given day. The High Court of Punjab and Haryana examined if the format (offered by Dream11) involves skill as dominant element. An individual, who lost money while playing the game brought action before the Punjab and Haryana High Court alleging that the format of Dream11 was a gambling under gambling legislation. The court in this case relied on the previous decisions and concluded that playing fantasy sports games required the same skill, judgement and discretion as in the case of horse racing. An appeal to the Supreme Court was dismissed. Therefore, based on the court ruling, it can be said that fantasy games are legitimate considering they have predominant element of skill involving selection of players based on their credentials and performance in particular. The court judgement has added to rapid expansion of apps and websites offering esports or fantasy games
Intellectual Property Issues
Protection of Facts and statistics
The question which is of foremost importance in fantasy sports games is whether use of facts and identities of players amount of infringement of Intellectual property rights of proprietors. The game operators rely upon factual information like current and historical scores, results, statistics and performance metrics to engage consumers. At the same time they use the name of Player and teams , logos, nicknames, images, models, personae, likenesses, characters and other descriptive information pertaining to Players and their teams.
Under the Indian copyright Act, the facts themselves are not copyrightable. Thus by corollary statistics are not protected as well unless it can be shown that substantial labour and resources have been spend in collecting, compiling and distributing game statistics in original format and arrangement. Further, the game operator has made a direct copy of the compilation.
The position on protection of statistics has been made further clear by the division bench (two judges bench) of the Delhi High Court in Akuate Internet Services Private Limited v.Star India Private Limited. The division bench rejected the Star India claim/ argument to prevent others from publishing or sharing match-information or facts arguing violation of broadcasting rights on the basis of the hot news doctrine, the tort of unfair competition and the principle of unjust enrichment. The Bench reiterated that match information, which essentially comprises facts, does not per se have any protection under the Copyright Act. Therefore, any protection to statistics, including under tort law, was precluded by virtue of Section 16 of the Copyright Act which states that no copyright will vest in anything that does not have protection under the provisions of the Copyright Act. Further, the Bench disregarded the applicability of the hot news doctrine to match information and statistics, and held that the fact or information passes into public domain upon its occurrence for the live audience, and upon broadcast for all others, and no proprietary rights can be claimed in it, irrespective of the fact that the person is reproducing this information for commercial gain or otherwise.
Protecting brand identity of players
Typically, fantasy sports games uses names of players, their images and/or photos, team logos, team labels, team emblems and team names. Under India Trade Marks law use of a trade mark without authorisation would constitute infringement even in relation to dissimilar goods and/or services. The propreitor of a registered trademark (which is involved in unauthorized use) is required to show he has a reputation in India and the use as such takes unfair advantage of or is detrimental to the distinctive character or repute of a trade mark. This concept deals with dilution of a reputed registered trade mark and is independent of “consumer confusion”. Also, the damage to reputation is also an important element to determine.
In the absence of a license from the proprietor, it is arguable that use of brand identity of players will amount to infringement. On the other hand, it can be contended by game operators that use of the trade mark/s owned by the proprietor is only for the functional purposes of identifying the players, teams and matches. Further, the concept of dilution is not fulfilled as use is not detrimental to the character or disparages the repute of trade mark/s. The use is in no way tarnishing the public image of either the players or the teams.
Applicability of Passing off
Whether the use of brand identities of players, their likeness, team logos etc., would amount to passing off. If the use is examined from the point of view that a) it will create a false impression that such products are in some way approved, authorised or endorsed by the player b) the name of the player is being used in connection with such promotion and for using his or her goodwill and reputation which he or she enjoys among public. On the face of it the connection or false impression is not made out. However, sports game operators need to be mindful that they do not overtly act or represent that any sport personalities or leagues or teams listed endorse the platform or games in any manner.
In the case of Gautam Gambhir v/s DAP & Co. & Ors, the Delhi High Court had held that mere use of the name of a celebrity (in this case Gautam Gambhir being a famous cricketer) does not result in suggesting any endorsement or sponsorship as long as no overt act is ascribed or attributed to the defendant whereby he attempted to make a false representation to any individual or public at large that the restaurants were owned or endorsed by the plaintiff. The Defendant was running restaurant under different brand names with the expression “ by Gautam Gambhir” which was his name eg 'Blu Wavs by Gautam Gambhir' 'Play Reloaded by Gautam Gambhir' 'Ghungroo by Gautam Gambhir and 'Hawalat by Gautam Gambhir'
The other point of defense generally taken by the fantasy sports game operators is that it is only the nominative use which is to serve the function of identifying the players, their teams and the matches being played rather than any use which is in violation of relevant laws and provisions of infringement and /or passing off in any manner, whatsoever.
Publicity/Privacy Rights of Players
The images and/or pictures of players and other artistic work which appear with team emblems and flags etc., are all a subject matter of copyright. Further names of the players in fantasy sports games is the subject matter of publicity rights - which have evolved from the right of privacy and the individual/s are allowed to profit from it. Thus fantasy games operator would be advised to obtain licence to use the images of the players and photographs that enjoy copyright protection. Further tread carefully while using a player’s persona and his name.
The internet penetration and widespread use of affordable smart phones coupled with cheap data being offered by telecom operators has given fillip to the fantasy sports. The legal approval of gaming platforms by courts has meant that platforms have attracted huge investment in last five years. One of the factors for growth is attributed to fans passion for deeper engagement with the sport, and a desire to be part of the action. Further, the platforms can be also used as a vehicle to express their opinion in having to select the players. The statement below from Yannick Colaco, India managing director at National Basketball Association (NBA) summarises the future of the industry, “I believe fantasy sports has a tremendous potential to grow. If you look at the key attributes, it is digital, it involves analysis, and data crunching. It builds fan communities and allows every sports fan to be the coach, manager or owner of their favourite teams. Quintessentially, that’s aspirational for every young Indian sports fan.”