Fantasy Sports

Fantasy Sports are online prediction games where you put together a virtual team of real
sports players. You earn points based on real-life statistics that are converted into fantasy
points. The better your player performs in real life, the higher your fantasy points.

1. It is a type of game, often played using the Internet, where participants assemble
imaginary or virtual teams composed of proxies of real players of a professional sport.
2. These teams compete based on the statistical performance of those players in actual
games. This performance is converted into points that are compiled and totalled
according to a roster selected by each fantasy team’s manager.
3. The fantasy sports are applicable to all the games such as Football, basketball, rugby,
cycling, hockey, tennis, motorsports, golf, athletics, cricket, volleyball.

Few major players in Fantasy Sports in India

1. Dream11
2. MyTeam11
3. Halaplay
4. My11Circle
5. 11Wickets
6. Mobile Premier League

Difference Between Fantasy Sports & Other Online Games Or Sports Betting

1. Fantasy sports are entirely different from all forms of online games that are in the
nature of e-sports, casual gaming etc. that do not need a real-life player to be actually
playing a real sports match to decide the outcome for the participant.
2. Fantasy sports, unlike other online gaming, is dependent on actualities, seasonality
and availability of real-time sports matches make it a non-addictive form of play
which sets it distinctly apart from other forms of online game that are perceived to be
in the nature of gambling and/or betting.

Economic Facts

Fantasy sports which began over 60 years ago as “fun” has today turned into a multi-billion
dollar industry and is growing rapidly.

1. The Online Fantasy Sports platforms and operators cumulatively paid GST of
approximately INR 445 crore in the Financial Year 2020, substantially higher from
INR 166 crore in Financial Year 2019, as per the FIFS report.
2. Fantasy sports as an industry has attracted significant amounts of Foreign Direct
Investment in India. In 2018 and 2019, the industry attracted FDI of INR 1,500 crore
approximately and has been growing exponentially. Details of Foreign Direct
Investment – FDI is available on the given link.
3. The industry’s estimates indicate that fantasy sports platforms and operators
cumulatively paid INR 166 crore in goods and services tax (GST) in Financial Year
2019 and INR 445 crore in Financial Year 2020. Read about Goods & Services
Tax on the linked page.
 4. Fantasy sports platforms have resulted in growth in digital transactions, which has
been a long-standing objective of the “Digital India” campaign, driven by the
Government of India. Go through the details of Digital India on the given link.

Is It Legal to Play Fantasy Sports in India?

 The legality of fantasy sports in India is dependent on whether the game qualifies as a
game of skill or game of chance. The latter falls under the ambit of gambling and is,
hence, restricted by state gambling laws.
 A game of chance is one in which outcome is strongly influenced by the application
of some instrument which can include but is not limited to dices, spinning wheels,
picking cards, numbered chits drawn from a bowl etc.
 While a game of skill is one where the outcome is determined mainly by physical or a
mental skill where chance has a very minuscule to non-existent role. A game of skill
is, therefore, one where a player needs to constantly learn, practice and refine skills to
be able to perform in a game
 Online Fantasy Sports as a sector has been widely debated on being a game of chance
rather than a game of skill even though it is so clearly a skill-based format that is
played by sports enthusiasts.
 There are multiple High Court rulings that recognize the legitimacy of Online Fantasy
Sports subject to them being played in certain specified formats.
 The fundamental petition challenging the views of the Bombay Highcourt regarding
Dream11 being a game of skill was dismissed outright by the Hon’ble Supreme Court
and one of the standing orders while discussing the matter of GST has clearly
instructed that tax matters need to be argued on merits and not on contentions related
to the legality of fantasy sports

Cases which elucidate the concept of legality of Fantasy Sports in India

1. Varun Gumber v. Union Territory of Chandigarh 1
Dream 11 is one of the world’s leading platforms for online fantasy sports games and
offer fantasy cricket, fantasy kabaddi and fantasy football games in partnership with
reputed websites and social media platforms, with a wide user base. This judgement
by the Punjab and Haryana High Court (“PHC“) has been the leading judicial
precedent for fantasy sports. This case was concerned with deciding whether fantasy
sports, a multiplayer online game, was skill based or would be caught by the gambling
legislations. The PHC held that playing fantasy sports required considerable skill,
judgment and discretion and the effective deployment of such skills and knowledge
by the participant also has a definitive effect on the outcome of the game. In
conjunction with the above conclusion, the PHC also reiterated the Supreme Court’s
stand that: (i) the competitions where success depends upon the substantial degree of
skill is not competition; and (ii) despite there being an element of chance, if a game is
preponderantly a game of skill, it would nevertheless be a game of mere skill. The
decision of the PHC was appealed before the Hon’ble Supreme Court of India.
However, the appeal was summarily dismissed.
2. Gurdeep Singh Sachar v. Union of India 2

1
MANU/PH/1265/2017
2
MANU/MH/1451/2019
 The Bombay High Court was next to rule on whether Dream11’s online fantasy sports
indulged in activities considered to be gambling/ betting/ wagering. A public interest
litigation was filed before the Bombay High Court in this case and the Bombay High
Court observed that unlike betting, winning or losing in fantasy sports was not
dependent on any team winning or losing in the real world.
The Bombay High Court held that “the case of the Petitioner is wholly untenable,
misconceived and without any merit. 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 attempt to reopen the
issues decided by the Punjab and Haryana High Court in respect of the same online
gaming activities, which are backed by a judgment of the three judges bench of the
Apex Court in K.R. Lakshmanan (supra), that too, after dismissal of SLP by the Apex
Court is wholly misconceived.”
3. Ravindra Singh Chaudhary Vs. Union of India & Ors. 3
Another public interest litigation was filed with respect to Dream11’s fantasy sports
games before The High Court of Rajasthan (Jaipur Bench). The Court reiterated the
position by the PHC, Bombay High Court and the Supreme Court and held that
fantasy games involved substantial skills and therefore does not amounting to
gambling.
A stay order in 2020, by the Supreme Court against the order of Bombay High Court
ruling fantasy sports games as a game of skill, opened the debate once again. Though
the matter is still pending before the Supreme Court, the Supreme Court in August
2021, upheld the legality of fantasy sports in an appeal made against the
abovementioned order by the Rajasthan High Court order. It is evident from the
available case law that a game of skill would not be considered as gambling and that
fantasy sports would not be considered a game of chance.4
4. Bombay v RMD Chamarbaugwala5
The Issue raised in this case was that Does Gambling qualify as trade, commerce or
intercourse? & It was held in this case was that Gambling or doing the business of
gambling was extra commercial and therefore it is not included in the ambit of 'trade,
commerce or intercourse'.
5. State of Andhra Pradesh v. K. Satyanarayana 6
The issue raised in this case was that Whether playing Rummy comes under the ambit
of game of skill or game of chance? & It was held by the Supreme Court that while
playing rummy one needs to memorize the fall of cards and one also need a practise
of discarding and holding of the cards, so rummy cannot be categorised under the
game of chance because for playing this game one needs requisite skills, therefore
rummy falls under the category of game of skill.7
6. KR Lakshmanan v State of Tamil Nadu8
3
MANU/RH/0499/2020
4
https://www.conventuslaw.com/report/online-fantasy-sports-in-india-a-shift-towards/
5
Judgement dated 9 April 1957 in Civil Appeal No. 134 of 1956.
6
https://indiankanoon.org/doc/84963/
7
https://www.legalserviceindia.com/legal/article-6525-emergence-of-fantasy-sports-vis-a-vis-online-gambling-
an-indian-perspective.html
8
Judgement dated 12 January 1996 in W.P(C) Nos.726, 1361 of 1986, 1053/87, 1028/86, 666/86, 1067/86,
1491/86, 923/86, I.A.3/92 in W.P(C) No.857/86, C.A.1715/75, CMP No.21945/86, 14162/86, 20859 & 24540
of 1986.
 The Supreme Court had observed that a game would be considered to be a game of
skill in which success primarily depends upon superior knowledge, training, attention,
experience, and adroitness of the player, and skill dominates the element of luck or
chance.
7. Junglee Games & Ors. Vs. State of Tamil Nadu9
8. the Hon'ble Madras High Court completely struck down a Tamil Nadu Government
law that put a blanket ban on all forms of online gaming, including games of skill.
The Court was of the view that imposing a blanket ban fell afoul of Article 19(1) (g)
of the Constitution of India and hence, completely quashed the amendment that
brought about the ban on all forms of the online game. The Court also specifically
pointed out that Games of skill are no more res Integra and that the ban was ultra vires
the constitution as it imposed a restriction on right to practice any profession, trade, or
business. The Court also mentioned and focused on the requirement that it is
necessary to regulate online gaming rather than prohibiting it altogether.10
9. K.R. Lakshmanan v. State of T.N.11
10. The Supreme Court held that “a game of chance is where the element of chance has a
preponderance over the element of skill and a game of skill is where the element of
skill outweighs the element of chance”. The judgments on the issue so far have
considered fantasy games to be a game of skill on the premise that in such games skill
predominates chance.12
11. M.J. Sivani & Ors. v. State of Karnataka, 13
12. the apex court held that – Even a skilled player in a game of mere skill may be lucky
or unlucky, so that even in a game of mere skill chance must play its part. But it is not
necessary to decide in terms of mathematical precision the relative proportion of
chance or skill when deciding whether a game is a game of mere skill. When in a
game the element of chance strongly preponderates, it cannot be game of mere skill.
Therefore, it is not practicable to decide whether particular video game is a game of
skill or of mixed skill and chance. It depends upon the facts, in each case14
Central and State wise regulations and drafts
NITI Aayog’s draft guidelines
Undoubtedly, the industry requires a national regulatory ecosystem, and a reliable legal
framework to operate. Some respite came in December 2020, in the form of NITI Aayog’s
Guiding Principles for the National Regulation of Online Fantasy Sports in India. The draft
guidelines propose a “light-touch” self-regulatory framework for fantasy sports, under the
aegis of an independent oversight board. The proposed self-regulatory organisation (SRO)
shall be recognised by the government, and would have membership of all the fantasy sport
operators. This would provide them a forum to deliberate with the governments at central and
state levels on all policy matters pertaining to the industry. Some of the key proposals:

9
2021 SCC OnLine Mad 2762.
10
https://corporate.cyrilamarchandblogs.com/2021/08/madras-high-courts-judgment-on-gaming-law-does-it-
provide-absolute-immunity-from-regulatory-scrutiny/#_ftn5
11
(1996) 2 SCC 226, 13.
12
https://www.azbpartners.com/bank/game-of-skill-vis-a-vis-game-of-chance-with-special-reference-to-online-
fantasy-sports-games/
13
M.J. Sivani & Ors. v. State of Karnataka, 6 SCC 289 (1995)
14
https://www.hpnlu.ac.in/PDF/06c2d85d-f45b-45df-9461-63e2643e2f4f.pdf
  SRO shall have an independent evaluation committee whose role would be to evaluate
the pay-to-play formats presented by the fantasy sport operators, ascertain and
confirm whether the format is skill-predominant.
 The evaluation committee will also have the power to set rules or recommend changes
to formats that will be binding on the fantasy sport operators. Furthermore, the draft
guidelines recommend the fantasy sport operators to maintain and submit periodically
all the statistical data to the SRO in order to demonstrate that the contests and games
are skill predominant.
 There should be age restrictions to prevent harm to minors and misuse.
 It also warns the fantasy sport operators against offering or advertising gambling
services or games of chance on their platforms.
 Operators should abide by advertising standards laid out by the Advertising Standards
Council of India and avoid advertisements that imply or represent that the winnings
on their platforms are “assured” or “guaranteed.”
 Participation in fantasy sports should not be represented as a means of livelihood,
sustenance, or even an investment opportunity.15
 Advertisement Guidelines: transparency and consumer rights
 
 The Advertisement Standards Council of India (“ASCI”) released certain guidelines
on advertisements on online gaming on 4 December 2020 (“ASCI Guidelines”)[11].
The ASCI Guidelines came into effect from 15 December 2020.
  
 Under the ASCI Guidelines, all advertisements relating to gaming should contain
certain mandatory disclosures and statements (whether such advertisement are in print
or audio/ video format) such as; (i) the game involves financial risk and may be
addictive and that the players should play at their own risk; (ii) the advertisement
should not present online gaming for real money winnings as an income opportunity
or an alternative employment option; (iii) the advertisement should not suggest that a
person engaged in gaming activity is more successful as compared to others; and (iv)
the advertisements should not depict any person below the age of 18 years or who
appears to be below 18 years of age, engaged in the game of online gaming for real
money winnings or suggest that such persons can play these games.
 
 Further, online fantasy sports platforms are also required to follow the draft
guide2lines for Advertising on Digital Media (“Influencer Guidelines”) issued by the
ASCI on 22 February 2021. Considering the impact of influencers on consumers, the
Influencer Guidelines suggests certain standards to be followed by influencers. These
standards include specific disclosures of the nature of posts by making a prominent
labelling of each digital media posts, restriction on use of filters which would
exaggerate the effect of claims being made and further directs influencers to conduct
due diligence about any tech or performance claims made by them. The Influencer
Guidelines also provide the specifications of labelling or disclosures to be followed in
picture posts, video posts and audio posts.
 
 These guidelines have been prescribed so that an accurate or correct information
regarding the financial and other risks associated with online games are portrayed to
the consumers.16
15
https://www.psalegal.com/fantasy-sports-industry-where-does-india-stand/#_ftn10
16
https://www.conventuslaw.com/report/online-fantasy-sports-in-india-a-shift-towards/
Central regulations
In India, there is no central legislation governing the subject of online games and fantasy
sports. The Public Gambling Act, 1867 (“Gaming Act”) is currently the primary central
legislation which governs gambling and betting. The Gambling Act provides an exception for
games which involve element of skill and such games are considered to be legal. However,
the Gambling Act does not prescribe or clarify what will be considered or deemed to be a
‘game of skill’.17

Information Technology Rules 2021

Section 4 (1) (b) (ii)

The rules and regulations, privacy policy or user agreement of the intermediary shall inform
the user of computer resource not to host, display, upload, modify, publish, transmit, store,
update or share any information that is defamatory, obscene, pornographic, paedophilic,
invasive of another's privacy, including bodily privacy, insulting or harassing on the basis of
gender, libellous, racially or ethnically objectionable, relating or encouraging money
laundering or gambling, or otherwise inconsistent with or contrary to the laws of India.

The Constitution of India

7th Schedule [Entries 34 & 62 of the State List]

The Court held that the online gaming is a legitimate business activity protected under Article
19(1)(g) of the Constitution of India.

The Indian Contract Act, 1872

'Agreements by way of wager, void'
Agreements by way of wager are void; and no suit shall be brought for recovering anything
alleged to be won on any wager, or entrusted to any person to abide the result of any game or
other uncertain event on which any wager is made.18

Differential Regulations in States

As it stands, every state in India, except Goa, Sikkim and the Union Territory of Daman
explicitly prohibits any sort of gambling, betting or wagering on games of chance.

The states of Assam, Andhra Pradesh, Nagaland, Odisha, Sikkim, Tamil Nadu and Telangana
have placed restrictions on games of skill as well. The restrictions are outlined as under –

Assam
The legal status of paid games of skill while clear is confusing, as the Assam Game and
Betting Act, 1970 prohibits all forms of betting or wagering on any game or sport, except
horse racing and lotteries, as the Act had extended the original Bengal Act of 1967. However,
it seems as though the Assam Act did not account for the 1913 amendment to the Bengal Act,
which allowed for an exemption of mere skill. As a result, there exists no exemption or

17
https://www.conventuslaw.com/report/online-fantasy-sports-in-india-a-shift-towards/
18
https://www.legalserviceindia.com/legal/article-6525-emergence-of-fantasy-sports-vis-a-vis-online-
gambling-an-indian-perspective.html
allowance for games of skilleither and online fantasy sports platforms do not operate for
residents in Assam.

Nagaland
The Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of
Skill Act, 2015 is one of the most recent statutes, and consequently one of the most modern
ones. The Act explicitly outlines what constitutes a game of skill to be one "where there is
preponderance of skill over chance, including where the skill relates to strategizing the
manner of placing wagers or placing bets or where the skill lies in team selection or selection
of virtual stocks". Thus, the statute has clearly recognised the skill involved in online fantasy
sports platforms.

However, under Section 7 of the Act, the statute has mandated a license to be obtained
through the issuing authority for entities wishing to offer such games on online media and
earning revenue for the same. This makes it extremely difficult for a new venture to operate
whatsoever. Moreover, the rules under the Act, despite being notified, are not available
online – thus posing compliance issues.

The fee for the license stands at ?10 lakhs per game per annum or ?25 lakhs per annum if an
applicant wants to offer a variety of games, which is to be doubled after 3 years and remains
valid for five years. Further, a 0.5% tax has also been provisioned under the rules. A host of
other guidelines including KYC guidelines, foreign deposits and banking requirements have
made the license undesirable and most platforms, including Dream11, have skipped trying to
get one.

Odisha and Telangana

The Orissa Prevention of Gambling Act, 1955 bans all forms of games for money and betting
or wagering where a "person intentionally exposes money or things of value to the risk or
hazard of loss by chance", except lotteries. Needless to say, online fantasy sports platforms
are not allowed in Odisha.

The Telangana Gaming Act, 1974, explicitly prohibits any act of risking money, or otherwise
on the unknown result of an event including on a game of skill. The Telangana Government
has recently made its intention in coming up with new rules for online fantasy sports, which
will encourage self-regulation and fantasy sports development in the state. It is important to
note that Telangana is one of the states which has a prohibition on games of skill as well.
However, the state government has shown its willingness in bringing about a progressive
piece of legislation and being a role model for other states. This clearly shows that with each
passing day the states are ready to accept the impact of fantasy sports in the economy and
regulate the same since it also has a huge potential to generate revenue for the states.19

Sikkim
Similar to Nagaland, Sikkim has also mandated the requirement of a license for an online
gaming platform involving chance. However, the licenses mandate that the games shall be
played from within the state of Sikkim itself only, and may only be offered within the
physical premises of gaming cafés within the state of Sikkim through intranet gaming
terminals. This requirement essentially rules out any platform which wants to operate outside
of Sikkim, which are, basically, all of them. Only two such licenses have been issued in the

19
https://www.mondaq.com/india/gaming/1112720/fantasy-sports-in-india-a-report
past decade, most likely for casinos operating within Sikkim which use newer online gaming
machines.

Andhra Pradesh and Tamil Nadu

Both of these states have recently passed amendments to their respective gambling acts.

Andhra Pradesh has taken a stern stance on the issue – as the exception for 'games of mere
skill' has been done away with. The new AP Gaming Act has now plainly prohibited online
gaming platforms involving money and issued notices to platforms such as Paytm to
completely stop their practices.

Tamil Nadu, on the other hand, has promulgated an ordinance to expand on the existing law
and taken online gaming platforms into its ambit of restriction – but continues with the
exemption for games of skill. Thus, online fantasy sports platforms continue to operate within
the territory of Tamil Nadu.20
Recently, the Tamil Nadu government passed the Tamil Nadu Gaming and Police Laws
(Amendment) Act of 2021 (“TN Act“), banning online wagering or betting. It also extended
this prohibition explicitly to games of skill as well. The Madras High Court vide an order
(Junglee Games & Ors. Vs. State of Tamil Nadu struck down the TN Act. The Court was of
the view that imposing a blanket ban fell afoul of Article 19(1) (g) of the Constitution of
India (Right to Practise any Profession, or to Carry on any Occupation, Trade or Business)
and quashed the TN Act. The Court instead specifically stated that it is necessary to regulate
online gaming rather than a blanket ban.21

Karnataka
In a similar move, the Karnataka government has promulgated an amendment to the
Karnataka Police Act, 1963 (“Karnataka Act“) which received the Governor’s assent on
October 4, 2021. The Karnataka Act banned all forms of gambling in the state in connection
with a game of chance (with the exception of horse races and lotteries), including online
gambling. The Karnataka Act also stated that “any act of risking money or otherwise on the
unknown result of an event including on a game of skill” will be an offence. The Karnataka
Act also expanded on the definition of gaming including in its gambit all” online games,
involving all forms of wagering or betting, including in the form of tokens valued in terms of
money paid before or after issue of it, or electronic means and virtual currency, electronic
transfer of funds in connection with any game of chance…”.
Shortly after, the operators of Dream11 suspended its operations in Karnataka while
simultaneously issuing the following statement: “Following the recent media coverage, our
Karnataka users have expressed deep concerns and anxiety on their safety and security. In
order to allay our users’ concerns, we have decided to suspend operations in Karnataka. This
decision is without prejudice to our rights and contentions under law.”22
Ban on Fantasy sports

20
https://www.mondaq.com/india/gaming/1020724/differential-state-regulations-on-online-fantasy-sports-
platforms
21
https://www.lexology.com/library/detail.aspx?g=caf7f281-38ec-4e20-8f08-1340b3f5de29
22
https://www.lexology.com/library/detail.aspx?g=caf7f281-38ec-4e20-8f08-1340b3f5de29
As it stands, every state in India, except Goa, Sikkim, and the Union Territory of Daman
explicitly prohibits any sort of gambling, betting, or wagering on games of chance. The states
of Assam, Andhra Pradesh, Nagaland, Odisha, Sikkim, Tamil Nadu, and Telangana have
placed restrictions on games of skill as well. Hence, users/people from these states are not
allowed to participate in Fantasy Sports such as Dream 11 where there is real money
transaction involved.

Reason for ban

Fantasy sports that are based on the skill of participants to determine the outcome, are
exempted from the definition of a bet or wager since they do not relay on chance or luck to
win, unlike online bingo and online casinos.
Fantasy Sports are classified as ‘Games of Skill’, where skill dominates over chance, with the
result dependent upon the “relative knowledge, training, attention, experience, and/or
adroitness of the participants”. This means that ‘games of skill’ like fantasy games do not fall
under the regulations prohibiting gambling under Indian law, though some state laws may
differ23
How are the bans implemented?
In Tamil Nadu, those found playing online gambling games will be levied a fine of Rs 5,000
and face six months’ imprisonment. The state has also banned electronic transfer of funds for
wagering or betting, and distributing winnings and prize money. The ordinance passed by the
state also seeks to punish those who run online gaming companies that involve wagering and
betting. In AP, the first offence attracts imprisonment of up to one year and a fine of Rs
5,000, with imprisonment extending up to two years and fine up to Rs 10,000 for every
subsequent offence.

Complying with the bans, gaming apps have made the games non-accessible in these states
for tournaments involving real money.

Sai Srinivas, co-founder and CEO of Mobile Premier League (MPL), says that they have in-
built geo-blocking to ensure that users from the states in question are unable to access cash or
real money tournament formats for any of the games they offer.

On the other hand, Sunit Warriach, CEO of RummyBaazi.com, says, “We have been prompt
in banning all the accounts and refunding the amount in users’ wallets from those states.
Furthermore, we shut down all the marketing activities in those states and do not entertain
any new registrations on the app.”

However, free versions of the games that do not involve real money transactions are still
available.24

Punishment for fantasy game ban

Tamil Nadu
23
https://www.labourfile.org/legality-running-playing-online-fantasy-sports-india/
24
https://www.thenewsminute.com/article/ban-or-not-ban-question-around-fantasy-gaming-platforms-
140617
People who will be found gaming online will be fined Rs 5,000 and be
punished with a six-month sentence, while those who open or keep open
online gaming houses will be fined Rs 10,000 and be imprisoned for two
years.25

Karnataka

They will attract a maximum imprisonment of from 6 months to three

years and a penalty of up to Rs 1 lakh.

25
https://www.insidesport.in/online-gaming-ban-fantasy-sports-industry-in-big-trouble-as-after-tamil-nadu-
karnataka-is-ready-to-ban-online-gaming/