What is Gambling?
Gambling is the wagering of money or something of value (referred to as “the stakes”) on an event with an uncertain outcome with the primary intent of winning money or material goods. Gambling thus requires three elements be present: consideration, chance and prize. The outcome of the wager is often immediate, such as a single roll of dice, a spin of a roulette wheel, or a horse crossing the finish line, but longer time frames are also common, allowing wagers on the outcome of a future sports contest or even an entire sports season.
In India we have the Dream11 which offers Fantasy Cricket, Kabaddi and Football.
What is Fantasy Sports?
Fantasy Sports is a sort of game in which you are allowed to select teams before the start of a real match and you are awarded points/cash based on the team selected, the players performance and real match’s result. There is a entry fee to enter into the cash contest and also there is a detailed points chart. The winnings depend on the type of match and ranges from few thousands to INR25,00,000.
These fantasy sports companies claim that what they offer is completely legal because, as per government laws, fantasy sports is categorised under Game of Skills and not under Gambling/Game of Chance. In India, only the State of Assam has no defined law on such games and thus Dream11 does not offer its services to residents of Assam.
As per the website “Dream11 Games – Games of Skill
In order to achieve success at the Dream11 Games a user must have knowledge (gathered through systematic research), attention, experience and adroitness. The ‘skill’ element of the Dream11 Games is found primarily in two aspects: drafting and playing. Users are subject to several carefully structured constraints and limitations in the game rules (which minimizes the instance of chance dictating the outcome) and are required to engage in a qualitative assessment of skills and relative worth of each player based on his strengths and weakness in light of the scoring criteria used by Dream11 and make a theoretical evaluation of the player’s prospective accumulated statistics over the course of the round at the time of drafting a fantasy team in a Dream11 Game. In order to succeed in the Dream11 Games, a user must apply his/her mind and judge the likely performance of each of his players in upcoming matches, and further the user is required to invest time and effort in analysing and tracking the performance of his players and other eligible players. For these reasons, the determination of the outcome in Dream11 Games is based on the predominance of skill over chance and it is our belief that the Dream11 Game is conclusively a game of skill in the eyes of the law. Accordingly, the Dream11 Games do not amount to ‘gambling’ under central and most state gambling statutes in India.”
Also this is from the FAQ’s from the website
“1. How do I win cash?
Your rank in a cash contest is decided based on the points your team earns during the live match. If your team finishes amongst the winning ranks of that cash contest, you’ll be declared a winner in the contest. We’ll credit the winnings in your Dream11 account, depending on the amount that you’ve won.”
Indian Law on Gambling
You would be surprised to know that our gambling laws are as old as 1867. We have the Public Gambling Act, 1867 which governs all kind of gambling activities in India. Obviously it does not have any provision on Internet Gambling.
As per the Act, “The expression “gaming” in the two Acts has to be interpreted in the light of the law laid-down by this Court in the two1957 cases, wherein it has been authoritatively held that a competition which substantially depends on skill is not gambling. Gaming is the act or practice of gambling on a game of chance. It is staking on chance where chance is the controlling factor. “Gaming” in the two Acts would, therefore, mean wagering or betting on games of chance. It would not include games of skill like horse racing.”
There are no elaborate definitions on Games of Skills or Games of Chance. And this is the loophole which companies like Dream11 exploit. Even rummy is considered a game of skill as per the act.
Right now the only Law which marginally governs online gambling is the Information Technology Act, 2000 which has only one provision related to online gambling and it is in no way adequate to regulate such a complicated offence as gambling.
Till India does not have any concrete law on gambling (specifically Online Gambling) companies like Dream11, Online Poker are going to pop-up because India is considered potentially the largest market for Online Gambling. We just need to be careful with such companies.