“Dream XI mein team bana lo”! Every Indian cricket fan must have heard this line several times during the recently concluded IPL 2020. From a struggling startup that faced uncertainty about the legality of its business model to the title sponsor of IPL 2020, Dream11, an Indian Fantasy Sports platform has made it big. With the rise of the likes of Dream11 and Mobile Premier League (MPL) the market for fantasy sports has surely been set in India.
What are Fantasy Sports?
Fantasy Sports are online prediction games where the fantasy gamers (persons playing the game) put together a virtual team of real sports players such as players from the Indian Premier League (IPL), English Premier League (EPL) the National Basketball Association (NBA), etc. These gamers are called “Managers” and they form a team of players in a specific league, who earn points based on real-life statistics that are converted into fantasy points. Managers earn fantasy points based on the players’ performances in real-life sports. Each Manager plays against other Managers and their teams. These managers manage a roster by adding, trading and selling players to form their team.
There are two types of fantasy sports that are prevalent. The first is the season-long draft system and the second one is the daily fantasy leagues played by the players worldwide.
In Indian fantasy sports platforms like Dream11, My Circle 11 we generally see the daily fantasy version being used. Managers pay an entry fee to enter a contest, the prize money for which is predetermined by the platform. Taking the example of cricket; points are earned on a variety of statistics like the runs scored by a batsman, wickets taken by a bowler and catches/run-outs inflicted by a fielder. The managers have to select a captain and vice-captain among the 11 players and their performance normally fetches some extra points. At the end of the match, the Manager with the highest points wins the game.
Prominent Fantasy Sports platforms in India
There have been many fantasy sports platforms in the offing in India, but it was Dream11 that made it big and popularised fantasy sports in India. Some of the other apps such as MPL, My11 Circle, My team 11, Fancode, Fancy11, Faboom, Fanfight, Guru 11, MPL, Balle Baazi are fighting out in the market which already is in surge with the number of new players joining in. Dream 11 has been the first Fantasy Sports platform that has entered the league of unicorns in India. They have also been at the forefront when it comes to legal suits as many cases have been filed against it and some are still pending.
How does “Fantasy Sports” work in India?
The Federation of Indian Fantasy Sports (FIFS) is the self-regulatory industry body of Fantasy sports in India. FIFS has been set up to protect consumer interest and formulate best practices for Fantasy Sports in India. FIFS also publishes a Charter for Online Fantasy Sports Platforms which lays down the ground rules for the members.
For an online fantasy sports platform (OFSP) to be considered for confirmation by the Governing Council, the Operator is required to obtain and submit an evaluation and opinion from the Innovation Committee of the FIFS on the proposed contest as a ‘game of skill’. In the recent Rajasthan High Court ruling, the Court observed that FIFS presently has over 35 of the largest fantasy sports companies as members, which cater to 99% of the fantasy sports users in India.
According to the charter, the members have to obtain a valid license and authorization for the usage of third-party intellectual property rights which include player images, photographs, trademarks, etc. on its platform. Members have to obtain a license and authorization to claim any official association with any sport’s governing body, player, team or tournament. FIFS has also adopted the Internet & Mobile Association of India (IAMAI) guidelines for self-regulation of the advertisements.
Legal Issue around online Gaming in India
Regulating Fantasy Sports: Central vs State Legislations
The Public Gaming Act, 1867 is a central law that prohibits running or being in charge of a public gambling house in India. However, under the Constitution of India, State legislatures have been entrusted with the power to frame state-specific laws on betting and gambling. As per the Seventh Schedule to the Constitution of India (Entries 34 and 62 of List II), the State Governments have been authorized to make laws on betting and gambling.
Fantasy Sports, which have been categorized as Game of skill, fall in a separate category and the State Gambling legislation of various states (with the exception of Assam, Odisha and Telangana) exclude game of skill from the ambit of gambling.
“Skill” V. “Chance”
The main legal hurdle faced by online gaming companies in India is whether it is a game of skill or a game of chance. Countries have adopted different approaches to defining chance and skill. India has followed the US model by applying the “dominant factor” test. The Satyanarayana case and the Lakshmanan case were the first cases where the “skill versus chance” question was addressed. The Courts were of the opinion that no game exists which can have ‘skill’ as the individual factor to determine the result. In State of Bombay v. R.M.D.C., the court propounded that if a game contains both elements, i.e. skill and chance, it would be considered a game of skill.
Skill vs. Chance as seen through Fantasy Sports
Bringing context into fantasy sports, the main question was whether choosing a team of 11 players out of 22 was something a player did on skill or whether it was the player taking chance by selecting the set of players. The Court for the first time had settled this question in the case of Varun Gumber v. UT of Chandigarh & Ors. clarified that: “Playing of fantasy game by any participant user involved forming of a virtual team by him which certainly required considerable skill, judgment and discretion. The participant had to assess the relative worth of each athlete/sportsperson as against all athlete/sportspersons available for selection. He was further required to study the rules and regulations of the strength of athlete or player and weakness also.”
The High Court made its stance clear that Dream 11 is completely a game of skill and held that fantasy sports did not amount to gambling. The Court also added that Dream 11 was conducting a business activity protected under Article 19(1)(g) of the Constitution.
IP Rights: Use of Players’ Names, Team Logos, etc.
Another issue that surrounds fantasy sports platforms is the usage of the players’ names and the team logos in their platforms. Fantasy sports platforms use players’ names, team logos etc. to enable the participants to choose specific players from specific teams. We are aware of the fact that IP laws enable players to have certain IP rights including image rights.
Fantasy sports are built around the leagues/ tournaments and the participants (players) therein and not around specific players and there are always commercial arrangements between the platforms and the leagues/teams which enables the platforms to use their IP. Moreover, the use of these players’ names and images by fantasy sports platforms is largely for the purpose of identifying those players and the use of their names, images do not in any manner suggest endorsement of the fantasy sports game.
Since Indian courts haven’t particularly dealt with cases of publicity rights with regard to fantasy sports, there is less legal jurisprudence available on this issue.
Judicial Developments related to “Fantasy Sports” in India
Two years after the Varun Gumber case, the legality of Dream 11 was questioned again in the Bombay High Court in the case of Gurdeep Singh Sachar v. Union of India case. The Court again sided with the previous judgment and observed- “The participants do not bet on the outcome of the match and merely play a role akin to that of selectors in selecting the team. The points are scored by the participants for the entire duration of the whole match and not any part of the match.” This was an interesting analysis done by the Bombay High Court which further strengthened Dream 11’s case. Dream 11 again got the benefit of the doubt in 2020 where the Rajasthan High Court dismissed the PIL which argued that the said app was involved in betting on cricket games.
Future of Fantasy Sports in India! What lies ahead?
Recently in D Siluvai Venance v. State, the Madras High Court has called for stricter regulations for online games. The Court showed concern by pointing out how youngsters are being attracted to play such online games where some prize money is involved. The Madras High Court also sent a notice to MPL ambassador Virat Kohli and My11Circle ambassador Sourav Ganguly for promoting online gaming apps. It is worth noting that the apps mentioned above not only include fantasy sports but they also have online rummy- which was the major point of contention in the Siluvai case.
Andhra Pradesh was the latest state to ban fantasy sports in its entirety when the savings and exceptions for ‘game of skill’ from the provisions of the Andhra Pradesh Gaming Act were done away with.
The decision of the Bombay High Court has been challenged before the Supreme Court already. The Supreme Court has issued notices to all the parties for hearing the fresh contentions. So, it can be said that the future of online fantasy sports hangs in the balance until the Supreme Court decides on the pending matter.