There are currently 8 crore + users playing Dream11 in India, But many still question how and why is Dream11 legal even though it is a pay to play application
What is Dream11?
Dream11 is a fantasy sports platform based in India that allows users to play fantasy cricket, hockey, football, kabaddi and basketball from all kinds of international and national leagues
Dream11 was co-founded by Harsh Jain and Bhavit Sheth in 2008, they introduced freemium fantasy sports in India for cricket fans. Currently there are about 8 crore+ registered uses playing Dream11.
How Dream11 works?
It is an online game where users create a virtual team of real-life players and earn points based on the performances of these players in real matches.
A user who scores the maximum points in his joined contest attains the first rank. Dream11 offers free and paid contests. A user has to pay a certain fee to join a contest and can win real cash. To participate in a Dream11 match, a user must be at least 18 years old.
How Dream11 is Legal in India
.Sports Gambling and Betting is technically illegal in India barring a few exceptions,.The primary legislative document that makes gambling in India a ‘grey’ area is the Public Gambling Act1867
The Public Gambling Act of 1867 is a central law that prohibits running or being in charge of a public gambling house. The penalty for breaking this law is a fine of ₹200 or imprisonment of up to 3 months.
Additionally, this Act prohibits visiting gambling houses. A fine of ₹100 or imprisonment of up to one month is the penalty.
But Indian law classifies games into two broad categories viz. game of skill and game of chance.
The Public Gambling Act explicitly states “nothing in this Act shall apply to games of mere skill wherever played” which means, in the absence of other laws against them, Hence Dream11 is considered a game of skill and Dream11 is legal in India.
Some states have banned wagering on games of skill as well, therefore, Individuals residing in the Indian states of Assam, Odisha or Telangana are not allowed to participate in Cash Contests on Dream11
Gurdip Singh Sachar, an advocate, recently filed criminal public interest litigation (PIL) against the Dream 11 in 2018
Gurdeep Singh Sachar contended that Dream11 was (a) carrying out gambling/betting/wagering in the guise of ‘online fantasy sports gaming’ in violation of applicable laws;
(b) evading taxes by levying inadequate goods and services tax (GST) on such offerings.
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 evasion of GST which was claimed by Gurdeep Singh Sachar
In 2017, a similar petitioner has questioned the relation of Dream11’s connection to sports betting in the High Court of Punjab and Haryana. To which, the High Court also had then ruled that playing fantasy sports online does not amount to gambling and involves a substantial degree of skill.
The Court also held that ‘the element of skill’ had a predominant influence on the outcome of the Dream11 game, which follows the following format:
All contests are run for at least the duration of one full sports match
No team changes are allowed by participants after the start of the sports match