Re-exploring the scope of “skill” in fantasy games: Precedential limitations and jurisprudential inconsistency

Introduction

Fantasy games (hereinafter FGs) have gained quite a lot of popularity in recent years.[1] With platforms like Dream11, MPL and other fantasy gaming websites sponsoring sports kits[2] and tournaments[3], their demand has touched different levels.[4] In the past there have been cases where questions have been put on the legality of such games alleging that they are no different from gambling or betting (which are prohibited in many Indian States).[5] In the judgments on this issue, the various High Courts have provided legal immunity to FGs by concluding that they are not a game of chance but a game of skill (betting on games of skill not being an offence). Nevertheless, the Tamil Nadu Government recently passed a Bill to ban any form of wager or online bets involving computers or any other devices.[6] The Bill covers games like rummy, poker and FGs within its ambit. This contemporary development has rekindled a debate on the issue of prohibiting or permitting betting/gambling activities.

In this piece however, the authors refrain from delving into the broad discourse of morality and pros or cons of allowing/disallowing betting and gambling activities per se. The objective of this article is limited to specifically argue that the exemption provided to fantasy sports under the current law by classifying them as a game of skill is vague, devoid of strong reasons and in need of reconsideration. Any reference made to disadvantages of gambling is only to draw a line of similarity between offline gambling and FGs.

Impact assessment — Fantasy games vis-à-vis ordinary gambling in the Indian social structure

Over the past, gambling has been prohibited mainly for the reasons of preventing addiction to such activities and to prevent people having intermittent and low income sources from losing their money on a mere chance of something happening or not.[7] It is quite important to acknowledge that the impact of FGs on individuals and society at large is not much different from ordinary betting/gambling.

In a country with nascent digital literacy[8] and vast income inequality, FGs just like ordinary gambling can have unanticipated implications for many. Online platforms such as Dream11 and MPL not only fascinate individuals who allocate a miniscule proportion of their income but also a different set of individuals whose participation in such activities comes at a diminution of their savings. While many start playing by investing a very miniscule sum initially, it is the temptation of gaining exponential money that makes them invest a large chunk of money. A sense of achievement infused by influential personalities[9] and some early benefits generally hook even people with scarce resources to such platforms. While advertisements publicising the advantages of fantasy gaming continue to be flashing with every new game, its acceptability amid the less resourceful takes deep roots. Thus, FGs too play out in a way and affect society in a similar fashion as conventional gambling by promoting addiction to chance-based money making and diminishing bare savings of the poor who choose to indulge in them.  However, just because the scale of money put in FGs by each individual is quite limited it does not appear to do much harm.

The article now proceeds to highlight how the structure and organisation of fantasy games is inherently similar to what has been prohibited by gambling laws in India.

Structure of online gaming and the present law

The Public Gambling Act of 1867[10] (the Act) does not provide anything specific with regard to online gambling and betting. However, since the development of the internet and technology was a distant imagination at the time when the Act was framed, the framers of the Act could not have envisaged the mechanism to regulate online gambling and betting. Nevertheless, the Act prohibits gambling activities that take place in a “common gaming-house”.

As per Section 1 of the Act, a “common gaming-house”, requires:[11]

(i) A house or room or tent or enclosure or vehicle or vessel or “any place” whatsoever in which any instruments of gaming are kept or used for gaming purposes. (Instrument of gaming for this purpose includes the use of any article as a means of gaming, the use of any document for evidentiary purposes, and the distribution of any winnings or monetary equivalent of that for this purpose[12]).

(ii) Instruments of gaming should be used or kept in such space with the objective of yielding benefit or gain to the person possessing, owning, occupying, and keeping such space or employing any such gaming instrument in such place.

FGs fulfil both of these requirements because:

  1. Though a non-tangible or virtual platform was inconceivable at the time the act was drafted, the use of the word “any place” at the end of the definition for common gaming-house widens its scope and should be understood to not only include any other physical structure but “any dimension” in which such activities could be organised. Moreover, the gathering of a large number of individuals on an app/website is functionally equivalent to actual physical gathering. Thus, the term “common gaming-house” in the present context, could very well encompass a website/server/portal facilitating gaming activities, and hence fantasy games.
  2. The online servers and terminals upon which such activities take place, the varied features made available by fantasy gaming apps and the preserved e-records facilitate gaming in a virtual environment and can therefore be put under the category of instruments of gaming. Also, as the fantasy sports companies charge a fixed percentage (Dream 11-15%,[13] MPL 12%) of the total money collected as “platform fee” they accrue profits for providing the platform for the gaming to take place.

FGs thus facilitate gaming in a virtual “common gaming-house” with the objective of profiting from the same and hence should be understood to be within the purview of the Act.

Loopholes in the judgments on fantasy games

The Supreme Court in K.R. Lakshmanan v. State of T.N.[14] 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.[15] However, the rationale given by the courts in coming to the same are not clear and satisfactory. This is for the following reasons:

(A) Conventional sports betting v FGs – What’s the difference?

As betting on horse racing is considered a game of skill,[16] Courts in the decisions till now have compared FGs with horse racing and drawn an analogy between the two to conclude that just like horse racing FGs also require the analysis of numerous factors like the relevant team and player stats, form of players etc and therefore is a game of skill.[17] However, there has not been any comparison or differentiation between FGs and conventional sports gambling (where two persons place a bet on the winning or losing of teams). It is believed that a bet on the winning/losing of a team is gambling because in it chance predominates skill.[18] Nonetheless, considering that every win/loss bet is simply based on gut feelings and requires no analysis, is wrong. In fact, betting on the winning/losing of teams requires roughly the same analysis as that in making a fantasy team. Such conventional betting also requires one to analyse factors like the past performance of the players, head-to-head standing, changes made in the team, if the match is on the home ground of any of the teams, etc. Thus, it is not clear how the courts have drawn a skill/chance-based difference between FGs and conventional sports betting and allowed the former while prohibiting the latter.

(B) Is win/lose factor necessary for bet to become gambling?

The Courts have placed more than necessary emphasis on the win/lose factor. One of the reasons for the Bombay High Court in Gurdeep Singh Sachar v. Union of India[19] to rule that FGs are a game of skill was that the result of a fantasy game is not dependent on the winning or losing of any particular team in a real-world game. However, as per the general definition for an activity to be gambling it is not a requirement that it is dependent on the win/loss in a real life game. According to Black’s Law Dictionary also, gambling is the act of risking something of value (especially money) for a chance to win a prize.[20] Moreover, some of the State Amendments in the Public Gambling Act, 1867, like the one in Himachal Pradesh shows that a win or loss in a real life event is not necessary and even a situation which involves betting on figures or numbers which have to be subsequently ascertained is covered under gaming.[21] As per the Court’s reasoning if two persons bet that who among the two players of the same team will score more runs, it will not be gambling as its result is not determined by a win/loss in real life. However, even though independent of the real match result, the runs scored by these two players would still be based upon chance and would not have any direct relation with the skill of the bettors.

Dilution of skill in fantasy games

Even if it is assumed in the first place that FGs are more skill based than chance based, there are certain factors typical to FGs due to which the scope of skill in them is diminished to an extent where it is predominated by chance. These factors are:

  1. Online platform: FGs are played through mobiles or PCs in a virtual environment. Thus, the degree of credibility and the scope of enquiry for ensuring the veracity of the results in FGs is quite limited when compared to physical games. The Supreme Court in M.J. Sivani v. State of Karnataka[22] observed that playing games like poker, blackjack, pacman through an electronic machine is not a game of skill as the machines on which these games were played could be tampered with, which can make the chances of winning unrelated to a player’s skill. Also, a Delhi District Court in Gaussian Network (P) Ltd. v. Monica Lakhanpal[23] observed that the degree of skill involved in playing games like poker in physical form cannot be equated with games played online as the scope of manipulation and collusion in an online event skewes it from a game of skill to that of chance. Similarly, as in FGs there is no option to check the opponents’ teams while the match is going on and it is possible to view them only after a specified time of the match getting over there is enough scope for manipulation which reduces the skill element.
  2. Option to create multiple teams: Fantasy gaming platforms provide the users with the option to create a number of teams (MPL – 6 teams, Dream11 – 11 teams) from a single account. This option allows the users to try different player combinations in different teams. While this provides greater security, it also increases the element of chance. This is because when a person chooses more than one team he/she is not only relying on some underlying skill but is also speculating or guessing that if team (1) does not perform then team; (2) could, if team does not perform the best then probably team; and (3) may and so on. Due to this the player is less dependent on the required analysis skill, if any, as there is no firm reliance on it.
  3. Point indicator: Fantasy gaming platforms assign different points (credits) to each player of a real match. Each FG player has a fixed number of points from which he/she can select the 11 players. The denoting of points to the real match players is based on their actual performances and past records.[24] Thus, a great player with thousands of runs or many wickets would be given a score of 10 and a relatively low performer would be given a 7 or 8. As this is quite visible to any fantasy gamer that a player worth 10 points is more likely to perform than the one who is worth 8 points, they are highly likely to choose on its basis rather than searching for prior stats and other data. Thus, the FG platforms already provide the gamers with quite good hints regarding whom to choose or not. Even a person who does not have any knowledge of cricket (for example) and the performances of different players could easily make a team by a simple glance at the points allocated to each player and thus the scope of required skill is very much diminished.

Conclusion

The authors in this piece submit that the immunity provided to fantasy games is inconsistent with the present law on gambling. For the lacuna pointed out in the judgments on the issue and the typical factors which make chance predominant over skill in FGs, they are not a game of skill and hence no different from gambling. Moreover, their impact on the general public is similar to that of betting and gambling. Hence, FGs should be allowed only if the law answers the bigger question of allowing gambling activities in the affirmative. Till there is no such development, the exemption to such games is faulty and irrational.


2nd year law student at National Law University, Delhi, e-mail: adarsh.kumar19@nludelhi.ac.in.

†† 2nd year law student at National Law University, Delhi.

[1] Madhav Chanchani, The Rise & Rise of Dream11, and Fantasy Sports Gaming in India, The Times of India (24-3-2019).

[2] Amol Karhadkar, BCCI Announces MPL Sports as Official Kit Sponsor for Indian Cricket Team, The Hindu (New Delhi, 17-11-2020).

[3] Revathi Krishnan, Dream11 — the New IPL Title Sponsor for 2020 after Vivo Ouster, ThePrint (18-8-2020).

[4] Venkat Ananth, Fantasy Sports in India Gaining Fast Popularity on the Back of IPL, The Economic Times (17-10-2020).

[5] Sudhansu Sahoo, Legality of Dream 11 (K&K Advocates and IP Attorneys, 6-3-2020) accessed 21-2-2021.

[6] The Tamil Nadu Gaming and Police Laws (Amendment) Act, 2021.

[7] Law Commission of India (276th Report, 2018) Ch. II, para 2.1

[8] National Statistical Office (585th report, 2020) Ch. VII, p. 240.

[9] Soumitra Bose, Sourav Ganguly, Virat Kohli using Star Power to Promote Online Gaming, Madras High Court not Amused after Suicides, Outlook (19-11-2020).

[10] Public Gambling Act, 1867

[11] Public Gambling Act, 1867, S. 1

[12] Public Gambling Act, 1867, S. 1(b).

[13] Akash Bagrecha, Mad in Cricket – Dream 11 Business Model, The Times of India (27-10-2020).

[14] (1996) 2 SCC 226, 13.

[15] Abhimanyu Chopra, Game of “Skill” vis-à-vis Game of “Chance” with special reference to Online Fantasy Sports/Games, (AZB & Partners, 5-3-2020) accessed 5-3-2021.

[16] K.R. Lakshmanan v. State of T.N., (1996) 2 SCC 226, (19).

[17] Varun Gumber v. UT of Chandigarh, 2017 SCC OnLine P&H 5372

[18] Legalising Sports Betting in India (Readers Blog, 22-9-2020) accessed 10-3-2021.

[19] 2019 SCC OnLine Bom 13059.

[20] Black’s Law Dictionary (8th edn., 2004) p. 1995.

[21] The Public Gambling (Himachal Pradesh Amendment) Act, 1976.

[22] (1995) 6 SCC 289.

[23] Suit No. 32 of 2012, decided on 17-9-2012.

[24] Varun Gumber v. UT of Chandigarh, 2017 SCC OnLine P&H 5372

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