VFX Fantasy sports industry to maintain the growth pace as Bombay High Court dismisses the PIL

Fantasy sports industry to maintain the growth pace as Bombay High Court dismisses the PIL

Good days are here for the fantasy sports industry! The allegation that ‘fantasy sports is gambling’ has been dismissed by the Bombay High Court and declared as the ‘game of skills’.

Public interest litigation (PIL) was filed at the Bombay high court recently by an independent petitioner, advocate Gurdeep Sachar against the fantasy sports entity, Dream11. The PIL had claimed that the promoters of Dream11 were encouraging gambling and also not paying Goods and Services Tax (GST). It had pled the court to initiate criminal proceedings against the gaming platform.

The ruling passed by the division bench of judges Ranjit More and Bharati Dangre noted, “The petitioner has lost sight of the fact that the result of the fantasy game contest on the platform of Dream11 Fantasy Pvt Ltd is not at all dependent on winning or losing of any particular team in the real world game. Thus, no betting or gambling is involved in their fantasy games.”

The Bombay High Court added that the issue of tax evasion would only arise if Dream11 was involved in gambling and since that claim has been dismissed there is no possibility of GST evasion or erroneous classification, which was claimed by the PIL.

According to a 2019 KPMG report, the 2017 High Court judgement has contributed to the growth of fantasy gaming in terms of a larger number of platforms started entering the market with similar formats and also leading to wider user adoption. The number of fantasy sports operators in India have witnessed a seven-fold growth since 2016, with 70 operators in 2018. The number of fantasy sports users in India has also grown 25 times to 50 Mn users in 2018 from mere 2 Mn users in June 2016, according to KPMG.

Major operators in the fantasy sports segment include Dream 11, MyTeam11, 11Wickets, StarPick and Fantain. Among these, Dream11 was reported to have the largest user base of 50 Mn, as of February 19, 2019.

If one is still unclear as to whether fantasy sports can be bracketed as gambling, one needs to simply turn to what Raonuz a cricket API founder and CEO Anto Kaspar have to say in regards to it: “Does investment require luck or skill? Is Warren Buffett the luckiest person on the earth? Is the sharemarket mainly for gamblers? The most logical answer would be, it’s certainly not luck. Well, luck may play a minor role, but it is skill & persistence that gives durable success. Fantasy cricket is no different from investment in share market. In both cases, you bet on someone and you have no control over their success or failure. In both cases, the result is uncertain and your analytical skills help you choose the one who has a higher percentage of success. One’s knowledge of cricket and one’s analytical skills play a major role in durable success. Predicting the outcome of Flip-A-Coin requires luck, predicting the outcome of 240 events (number of balls in a T20 match) which have happened 100’s of times before requires analytical skills and field knowledge about the game. The players should necessarily have enough analytical skills about the game which will only bring success in their games. According to researchers, they have devised an algorithm to generate fantasy teams from the same pool of players that is available to users. The algorithm was designed to follow the rules of each game. The researchers ran thousands of games and looked at the results /scores between the actual fantasy players against the computer-generated fantasy player. Therefore, the fantasy league is not merely limited to gambling alone, instead, it requires a lot of analytical skills and knowledge about the game in order to be successful in the fantasy league. Only skilled players will taste success.”

With the Bombay High court verdict, the industry is happy and is aiming to maintain the growth pace. As fantasy sports game Gamezy founder and CTO Prithvi Singh said “We are happy and welcome the decision taken by the Bombay High Court. This move would be an impetus to the fantasy sports market in India. Fantasy gaming users can now continue to enjoy the sport without any apprehensions. The nature of this sport basically arises out of user’s superior knowledge, judgement and attention thus labelling it as skill based games. Additionally, users have protection guaranteed under the Article19(1)(g) of the Constitution of India.”

Deeper engagement in fantasy sports is driving consumers to spur a greater passion for it in India by the developers and the federation. “WorldCup is a special tournament, all Indians wait for this for four years. Fantasy sport gave these fans an option to express themselves off the field” said fantasy sport game My11Circle head of business, Saroj Panigrahi. Thus the prediction of KPMG that fantasy sports platforms to cross 100 Mn by 2020  seems to be plausible in the near future.