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Dismissing a Special Leave Petition (SLP) recently, the Supreme Court of India has emphasized that with the dismissal of similar SLPs, the legality of the Online Fantasy Sports (OFS) format as offered by Dream11 as a ‘Game of Skill’ has been already sustained.

The Division Bench comprising Justice Rohinton Fali Nariman and Justice B.R. Gavai said,

“This matter is no longer res integra as Special Leave Petitions have come up from the Punjab & Haryana High Court and have been dismissed by this Court as early as on 15.06.2017.”

The present SLP was filed against a Rajasthan High Court order which held that online fantasy game is a ‘Game of skill’ and there was no question of betting or gambling. The High Court added that winning or losing in a Dream 11 game depends on the skill and knowledge of the participant.

Challenging this order, the Petitioner averred before the Apex Court that the Dream 11 cricket game is a play of sheer chance. For this contention, the petitioner placed his reliance upon a State of New York Supreme Court Appellate Division judgment dated 06.02.2020 in which, according to him, the fantasy sports spoken of in this matter have been held as pure gambling and not games of skill.

However, stating that the matter is not unique and similar SLPs have been dismissed earlier, the Apex court dismissed the present one too.

Matter in Brief

In a petition before the Rajasthan High Court, it was submitted that public in general are cheated in the name of "Dream 11" game and people become culprit of gambling and betting without having the proper knowledge of law.

However, rejecting these allegations, the Rajasthan High Court stated that “playing of fantacy game by any participant user involves virtual team by him which would certainly requires a considerable skill, judgment and discretion. The participant has to assess the relative worth of each athlete/sportsperson as against all athlete/sportspersons available for selection. He is required to study the rules and regulations of strength of athlete or player and weakness also. The several factors as indicated above submitted by the respondent - company would definitely affect the result of the game”.

The High Court relied on the decisions of the High Court of Punjab & Haryana and Bombay, as well as, the dismissal of challenges against these decisions by the Supreme Court, and said that Dream 11 games involving “substantial skills” was a “business activity” protected under the fundamental right to practice, trade or any profession under Article 19(1)(g) of the Constitution.

What is a ‘Game of Skill’

Gambling falls under Entry 34, List-II of the Seventh Schedule to the Constitution of India, 1950 (“Constitution”). Sections 3, 4 and 5 of The Central Public Gambling Act, 1867 (“Central Gambling Act”) prohibit the operation of and visit to gambling houses. Whereas, Section 12 of the Central Gambling Act exempts the application of the said Sections to “any game of mere skill”. 

The Supreme Court, in the cases of Andhra Pradesh v. K. Satyanarayana [1968] and Dr. K.R. Lakshmanan v. State of Tamil Nadu [1996], interpreted the phrase ‘game of mere skill’ to mean “preponderantly a game of skill”.

In the Satyanarayana case, the Supreme Court held that the game of Rummy is not a game entirely of chance because the distribution of cards being dependent on the card placement in the shuffled pack does involve an element of chance, but that alone does not make the same a game of chance. Hence, the game of Rummy was held to be “mainly and preponderantly a game of skill”.

Similarly, in Lakshmanan case the Apex Court declared horse-racing to be a ‘game of mere skill’ observing that success in horse-racing depends on a substantial degree of skill. The Apex Court held that 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 High Courts of Punjab & Haryana, Bombay and Rajasthan applied the tests laid down by the Supreme Court in the cases of Satyanarayana and Lakshmanan and declared fantasy sports to be games of ‘mere skill’ that do not amount to gambling.

(Case Title: Avinash Mehrotra v. State of Rajasthan & Ors.)