This is the second of a series on the legality of fantasy sports that Team Vinfotech has been running on Indian Laws. In the last blog “Indian laws on fantasy sports business you need to know for 2017” we talked about laws that separate gambling and fantasy sports in India and we learnt that fantasy sports is considered a ‘game of skill’ not a ‘game of chance’. This time, we want you to get all the information about the legality of running or maintaining a fantasy sports website or application in India.

Are fantasy games the same as gambling?

In India, legally speaking, fantasy games including Indian fantasy sports, are considered game of skill and hence do not fall into the category of gambling. The Indian legality of Fantasy Sports states it as a skill-based game that doesn’t violate The Public Gambling Act of 1867. This judgement is based on two critical factors; the first being, when these laws were passed against gambling, the internet space was far from existence, leaving it an unchartered territory under the particular Bill.

The second-factor being, that Fantasy Sports are stated as “skill-based games”- with little dependency on chance- they are rendered acceptable under the same law. In India, games like Rummy and Poker are also declared legal over the purview that they require a player to have superior knowledge, experience, training, etc. and hence fall under the category of “skill-based games”. Both gambling and betting have been prohibited by the Central and State laws that’s because either certain states follow the Public Gambling Act 1867 or have their own laws regulating gambling. The only exception is the state of Sikkim that has enacted a law for online gambling and sports betting.

In 2017, the Punjab and Haryana High Court also ruled that playing online fantasy sports does not amount to gambling as it requires a substantial degree of skill. Recently, in 2019 a petition was filed by a Mumbai-resident, stating fantasy sports are luring people to gamble their hard-earned money and, hence, are a form of gambling. He also contended that Dream11 was allegedly evading Goods & Services Tax (GST). Bombay High Court rejected both the allegations by observing that substantial skill was involved in playing and the results are not dependent on winning or losing of any particular team in the rea;-world game. Thus, no betting or gambling is involved in their fantasy games. Playing fantasy sports is considered a game of skill by the Bombay and Punjab & Haryana High Courts; however, playing fantasy sports is not allowed in Indian states like Assam, Odisha, and Telangana.

What kinds of regulations on online games exist in India?

While this industry sees a green flag in most parts of India, there are certain states such as Sikkim and Nagaland that have inculcated laws such as Sikkim Online Gaming (Regulation) Act, 2008 and Nagaland Prohibition of Gambling Promotion and Regulation of Online Games of Skill Act, 2016, respectively. These laws help regulate the participation and distribution of such games- ensuring a monitored platform for the same. IPL Fantasy League 2017 has been a massive hit amongst cricket lovers in India, who love to spend hours together, forming a squad and following up on the IPL matches to track their outcomes. They have their daily challenges for users to fulfill, thus deeply engaging their contestants. As addictive as the game has been so far, the prizes have been interesting- ranging from autographed jerseys to autographed bats and toss coins. That’s also legally acceptable so far.

Fantasy industry standards in India are regulated by the Federation of Indian Fantasy Sports (FIFS) earlier known as the Indian Federation of Sports Gaming IFSG, India’s first and only Fantasy Sports self-regulatory industry body that was established in 2017. The federation sets up self-regulation standards for the fantasy sports industry in India until the government comes out with any rules and laws.

What laws govern the running of fantasy sports websites/apps in India?

Running a fantasy sports website or application in India is legal but with certain restrictions owing to the type of games hosted online. It is safe to say that when cash for stakes is involved, a fantasy sports or game may be required to comply with additional legal compliances. However, largely fantasy sports such as fantasy cricket or fantasy football require knowledge, research and skill of the participants, they are exempted from the definition of a bet or wages, unlike online casinos or bingos. Hence, it is fairly legal to run a fantasy sports website or application in India.

The exception to this rule are participants from the states of Assam, Odisha and Telangana where it is not clear if the games of skills can be played for free. If you own a national level fantasy sports website, users from these states can play all the free games but not the paid formats.

What’s the major challenge in running fantasy sports website?

As long as there’s no gambling, online lottery involved, fantasy sports websites can be run and managed legally with permissions from the states. The only challenge in India is the lack of a uniform policy framework on fantasy games. The players in the fantasy sports industry have to ensure that fantasy sports remain games of skill and do not become games of chance.

One thing that’s been made clear by the courts is that online fantasy games are not considered gambling games and as a result, considered like any other online business.

Till the time the government comes up with a clear cut policy framework on betting and gambling games, fantasy sports entrepreneurs and startups in India can do a legal business without getting into any hassle

If you wish to know more about Indian laws on starting a fantasy sports business in India, we would be happy to answer your queries.