The Legitimacy of 'Satta'

On Online Gambling, Dream 11 & The Paytm Controversy

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The Indian Premier League fever has yet again exhilarated the emotions of cricket fans all over the world. This has a direct bearing on the online betting and gambling activities especially, given the fact that this year, Dream 11 has replaced Vivo as the title sponsor for the 13th Edition of the League. 

Dream 11 is an India based fantasy sports platform which allows users to play fantasy games like cricket, football and hockey. Such platforms have enabled people to participate in betting without going through the extra hassles of finding a bookie. All one needs is a smartphone and an internet connection, and they could bet from anywhere at any given point of time. 

Fantasy sports is a self-regulated industry in India and it is being regulated by the  Federation of Indian Fantasy Sports. It was formed in 2017 and Mr. Harsh Jain, the founder of Dream 11, is the President of the Federation. It was established with the main aim to protect consumer interests and to create standardized best practices in the Fantasy Sports Industry. 

These major sporting events that happen on a yearly basis almost always trigger the curiosity amongst the fans and users. One cannot help but wonder as to the legality and safety aspects of such platforms that are involved in online betting activities.  

Gambling Laws in India

In India, Gambling is a state subject and therefore, the legal position with respect to gambling differs from state to state. We do have a central law named The Public Gambling Act, 1867 and it has been adopted by certain states like Punjab and Uttar Pradesh. However, there are other states like Goa and Sikkim who have enacted their own laws to govern the same. This is the reason why we have casinos in only three states in India- Goa, Daman & Diu and Sikkim. 

If we go by the Public Gambling Act, 1867, it has made all types of betting or gambling, more or less, illegal. The grey area still exists owing to the fact that the act does not define the term ‘Gambling’ and the role to interpret the same has often been entrusted to the Indian Courts.  With this being said, the law is about 150 years old and it therefore, does not address the space of online gambling.  This actually puts the public in a tricky spot and they are often confused and unsure about the legality of these online fantasy sports games. However, it is pertinent to mention here that Sikkim and Nagaland are the only two states in India that have a legislation to address and deal with online gambling. 

Game of Chance v. Game of Skill

Over all these years, the Indian courts have taken a good look at the concept of gambling, both in online and physical space, and have been able to come up with a distinction to classify and determine the legal and illegal activities in this space. These activities can be divided into two categories – ‘Games of Chance’ and ‘Games of Skill’. The general rule now is that those activities falling within the purview of ‘Games of Skill’ can be excluded from the ambit of gambling in India and therefore, would be considered legal activities. This has rather become the litmus test to determine if a certain activity could be allowed or not. 

The Hon’ble Supreme Court explained the difference between the two in a very accurate manner. As per the court, ‘Game of Skill’ is one in which success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player. ‘Game of Chance’ is one in which the element of chance predominates over the element of skill, and a ‘game of skill’ is one in which the element of skill predominates over the element of chance. It is the dominant element- ‘skill’ or ‘chance’ – which determines the character of the game. 

Legality of Dream11

The legality of Dream11 has been challenged a number of times before various High Courts and the Supreme Court. The courts have upheld the legality of Dream 11 on the ground that the fantasy sports carried out by the company involve a substantial degree of skill and therefore, they do not amount to gambling. It was further held that the users take various factors into consideration for playing online fantasy games on this platform such as – statistical performance of the players, previous records, weather conditions, etc. and the result is not dependent on the winning or losing of a particular team in the real game. 

Paytm V. Google

It was all over the internet that Paytm was removed from Google Play Store on Friday and was restored by the end of the day. The reason behind the same was that Google Play Store has a very strict gambling policy and as per Google, Paytm had violated it. This happened in lieu of the fact that Paytm announced its own fantasy league, Paytm Cricket League on the lines of Dream 11, a day prior to the start of the 13th edition of Indian Premier League. Paytm introduced a cash back component for its users who could win cash rewards on the basis of the player's performance. This violated Google Play Store’s gambling policy and hence, the removal. 

The Google Play Store policy states that – “For all other locations (except UK, Ireland and France), we don’t allow content or services that facilitate online gambling, including, but not limited to, online casinos, sports betting and lotteries, and games of skill that offer prizes of cash or other real world value”.

To this, it was Paytm’s stance that it launched a campaign on its app named Paytm Cricket League, which allowed users to get player stickers after every transaction they did. These stickers could then be used by the users to earn cashback. To be in compliance with Google Play Store’s policy, Paytm has temporarily removed the cashback component and it is back on the Play Store for the time being. The future course of action would depend on the understanding and negotiations between the two technology giants. 

Additionally, for those of you who were wondering as to why you cannot find Dream 11 and other such applications on Google Play Store, well, this very policy is the precise reason for the same. 

The exact position of online gambling in India is still not crystal clear for there is no legislation regulating the same. Though the Indian Courts have devised a distinction with respect to the dominant element, i.e. ‘skill’ or ‘chance’ to determine the validity of an activity, relying upon the same and adjusting it according to the facts of each situation could become burdensome and would be time consuming. For this reason, the legislature should work on devising a legislation in order to give more clarity to businesses engaged in such activities and their users.  

(Image Credits: FT/Daniel Mitchell)

The All India Gaming Federation, the apex Industry body for online skill gaming in India, in a blog, has focused on the need to recognize and regulate e-Sports in India. It states that government regulation will not only provide legitimacy to e-Sports but will also help address the problems in the e-Sports business today which includes match fixing, fraud and doping issues. Additionally, an effective regulation of e-Sports can legitimize the sport, build revenues, boost employment and create a transparent model for governing e-Sports in India. 

This being said, the present position with respect to online fantasy sports in India is that it is considered legal. These sports activities fall under the category of ‘Game of Skill’ and are therefore, not considered gambling. Moreover, owing to its recent conflict with Paytm, Google might consider amending its policies to be more liberal towards fantasy sports considering the fact that more and more people are getting accustomed and participating in it. This way, Dream 11 and other such applications may also make their way to the Google Play Store.