An online gaming company offering fantasy sports as well as online Rummy and Poker recently enquired about which states they can offer their products and which states they cannot as some states have expressly prohibited or banned such Fantasy Sports, Rummy and Poker.
The regulatory framework related to online Fantasy Sports, Rummy, Poker and other products is a hotchpotch of various central and state regulations.
As per the Constitution of India, betting and gambling are State subjects, hence states are empowered to enact state specific laws to regulate betting and gambling.
The Public Gambling Act, 1867 is the mother legislation regulating all gambling activities.
The Public Gambling Act, 1867 was adopted by several states including Uttar Pradesh, Madhya Pradesh and Delhi. Other states have enacted their own legislation to regulate gaming/ gambling activities within their territories (“State Enactments”).
The Public Gambling Act, 1867 and most State enactments have been made prior to the advent and spread of the internet; hence they do not expressly cover the subject of online gambling.
Below is a list of State Enactments and their provisions on online fantasy sports and gambling.
States in India that still follow the Public Gaming Act include Andaman Nicobar, Arunachal Pradesh, Chandigarh, Dadra and Nagar Haveli, Haryana, Himachal Pradesh, Lakshadweep, Punjab, Madhya Pradesh, Chhattisgarh, Manipur, Mizoram, Tripura and Uttarakhand.
The Supreme Court, in State of Bombay v. R.M.D. Chamarbaugwala, has interpreted the words ‘mere skill’ to mean “preponderantly of skill”. It also held that conducting of skill games does not amount to “gambling”. Games of skill therefore are not prohibited by the Gambling Act.
The jury is still out on whether Fantasy Sports, Rummy and Poker are games of skill. Various High Courts and the Supreme Court have taken differing stands on this issue.
The Supreme Court first dealt with the question of what constitutes a game of skill in State of Andhra Pradesh v. K. Satyanarayan. In the said judgement, “Rummy” was held to be “mainly and preponderantly a game of skill” and hence, could not be criminalized under the Pubic Gambling Act. In Dr. K.R. Lakshmanan v. State of Tamil Nadu, The Supreme Court held that horse racing was preponderantly a game of skill. Thus, the ‘preponderant factor test’ or ‘dominant factor test’ became a cornerstone for testing whether a particular game was a game of skill or chance. This test identifies and recognizes that most games contain both chance and skill, however, the dominance of one factor over the other is to be treated as the deciding factor to determine whether it falls under the game of skill or chance.
In Shri. Varun Gumber v. Union Territory of Chandigarh & Ors, the High Court of Punjab and Haryana held that fantasy sports required a considerable amount of skill and thus was a game of skill and thus does not fall within the ambit of gambling. A challenge to this judgement was dismissed by the Supreme Court. The High Court of Bombay in Gurdeep Singh Sachar v. Union of India, and the High Court of Rajasthan in Chandresh Sankhla v. State of Rajasthan have held Fantasy Sports to be preponderantly of skill and hence legal. The Supreme Court vide an order dated 6 March 2020, stayed the decision of the Bombay High Court in the Gurdeep Singh Sachar case, thereby throwing the entire issue of legality of Fantasy Sports into uncertainty.
However, the decision of the Punjab and Haryana, and Rajasthan High Courts on legality of Fantasy sports still holds ground. In Ravindra Singh Chaudhary v. Union of India The Rajasthan High Court considered the effect the stay of the Supreme Court on the Gurdeep Singh decision and concluded that online Fantasy Sports do not fall under the ambit of gambling/betting.
Conclusion
The law on online fantasy sports and games thus, remains in flux and till the decision of the Supreme Court, the decisions of High Courts holding such games as games of skills holds and hence, they continue to be legal, except the states where they are specifically banned.
So, play on!!