Online Fantasy Sports in India: A Shift Towards Uniform Legal Approach

Posted On - 18 May, 2021 • By - Souvik Ganguly

Fantasy Sports: A brief history

Since the 1990s, the advent of the internet led to the large-scale popularisation and commercialisation of fantasy sports leagues globally. Fantasy sports platforms and operators have developed different kinds of competitions broadly based on the nature of sports, seasonal duration and number of sporting teams. Sports fans can form fantasy teams and engage in competition with other fantasy teams and the winner is determined by the performance of players or teams in real-life competitions. The participants pay an entry fee to the fantasy sports league operators and create one or more fantasy teams to compete with other participants.

In India, the fantasy sports competitions started from the early 2000s, however it took almost a decade for this to gain popularity, largely driven by the availability of affordable smartphones, internet penetration and the growth of different mobile application platforms. Some of the major active fantasy sports platforms in India are Dream11, Mobile Premier League, HalaPlay, My11Circle, MyTeam11, BalleBaazi, iGamio and Nostra Pro.

Online Gaming & Fantasy Sports: global scenario & trends in India

Globally, the online gaming industry is one of the fastest growing industries and fantasy sports segment forms a major constituent of this industry. As of 2020, its value was approximately USD 20.69 billion, and it is expected to grow at a CAGR of 12.8% to reach USD 48.07 billion by 2027[1]. The United States is one of the major markets for online fantasy sports and its value as of 2021 is estimated to be USD 8.4 billion[2].

India is evolving into one of the major markets for online gaming and fantasy sports. It is estimated that 100 million users joined various fantasy sports platforms in 2020 and currently around 14% of the smartphone users in India engage in fantasy sports gaming apps. The segment clocked a gross revenue of around USD 340.47 million in 2020, a 3X increase from revenue in 2019 (USD 131.64 million). The market is expected to be worth USD 3.7 billion by 2024. Investors have taken keen interest in this sector and an estimated amount of USD 112 million has been invested in fantasy sports platforms in last 5 years[3]. .

Some of the active investors in this sector in India are Kalaari Capital, Tiger Global Management, Think Investments, Kae Capital, Multiples Alternate Asset Management and Steadview Capital Management.

Legal and regulatory landscape

Despite the tremendous growth potential of fantasy sports games in India, the legal regime governing online games and fantasy sports has largely remained vague and ambiguous.

The major issue surrounding legality of the fantasy sports in India is based on the ‘game of skill v. game of chance’ debate. Due to the involvement of a large public interest issue of sports betting and gambling, the Indian government has generally adopted a conservative approach while scrutinising such leagues and competitions, especially where the prize involves direct cash rewards. Although betting and gambling laws in many jurisdictions (including India) restrict activities of wager or gambling based on sporting events, sport betting is a huge industry globally with an estimated worth USD 218.49 billion as of March 2021[4]. Since last few years, there has been a growing demand in India for legalising sport betting (with certain regulations and guidelines).

In India, there is no central legislation governing the subject of online games and fantasy sports. The Public Gambling Act, 1867 (“Gaming Act”) is currently the primary central legislation which governs gambling and betting. The Gambling Act provides an exception for games which involve element of skill and such games are considered to be legal. However, the Gambling Act does not prescribe or clarify what will be considered or deemed to be a ‘game of skill’.

The Supreme Court of India, in State of Bombay v RMD Chamarbaugwala[5], had interpreted the term ‘mere skill’ to include games which predominantly have an element of skill.  Based on this interpretation, the Supreme Court in KR Lakshmanan v State of Tamil Nadu[6], had observed that a game would be considered to be a game of skill in which success primarily depends upon superior knowledge, training, attention, experience, and adroitness of the player, and skill dominates the element of luck or chance.

In the matter Varun Gumber v Union Territory of Chandigarh[7], the High Court of Punjab and Haryana held that Dream11, a fantasy sports platform, is a game of skill, as it requires exercise of superior knowledge, judgment, attention, a substantial degree or preponderance of skill. The court observed that participating in online fantasy sports involves drafting of a virtual team which involves exercise of considerable skill and assessment of players and rules of the contest. A user is also required to create a virtual team with the limited credit points available to draft athletes where the price of virtual players is based on their relative value and ability. Users are also required to follow real events which will help in winning a contest. Based on these findings, the court held that Dream11 is a game of skill and thus not prohibited under the Gaming Act.

The Bombay High Court in Gurdeep Singh Sachar v Union of India[8], also upheld the validity of online fantasy sports platform Dream11, in line with the decision rendered by the Punjab and Haryana High Court. The court while upholding the validity of the fantasy sports platform observed that it is a game of skill as the users do not bet on the outcome of a match but merely play a role in selecting a team and the points are scored by the users for the entire duration of the match and not any part of the match.

However, the Supreme Court of India, by its order dated 6 March 2020[9] has stayed the operation of the decision rendered by the Bombay High Court and the issue remains unresolved.

Under the Constitution of India, betting and gambling is a state subject and each state has its own rules and regulations relating to betting and gambling. Some of the states such as Andhra Pradesh, Assam, Odisha, Telangana, Tamil Nadu, Nagaland and Sikkim have banned online fantasy sports.
Since these platforms operate through online medium, different legislations in different states are causing uncertainty on the validity and viability of their business models and loss of confidence amongst the investors (including foreign investors).

NITI Aayog Discussion Paper: uniform and principle-led approach 

NITI Aayog, the public policy think tank of the Government of India, had released a draft discussion paper in December 2020, on Guiding Principles for the Uniform National Level Regulation of Online Fantasy Sports Platforms in India (“Discussion Paper”)[10]. NITI Aayog observed that the lack of a uniform set of rules and regulations is stifling innovation and product development in this industry which in turn is having a negative impact on foreign investments, employment opportunities and loss in revenues for the Government. Through the Discussion Paper, NITI Aayog has advocated for a formal recognition of fantasy sports industry and a principle-led governance which will involve principle-based guidelines which will be recognised both at the national and the state level institutions and organisation. Further, NITI Aayog has also suggested setting up independent and uniform grievance redressal process for this industry. Considering the dynamic nature of the industry, NITI Aayog suggested that a single self-regulatory organisation for fantasy sports should be set up and recognised by the Government, whose governance should be undertaken by an independent board.

Further, NITI Aayog suggested formulation of certain guidelines for such fantasy sports platforms which includes ensuring proper governance, transparency, consumer protection and accountability. Further, the guidelines require the platforms to ensure that; they are compliant of all the applicable laws in India; the contests are predominantly skill based; pay-to-play format is not offered to users below 18 years of age; and the term of participation in fantasy sports contests are fair and transparent. To address the existing gap because of different State legislations the guidelines suggest that self-regulatory organisations should request State governments to consider granting online fantasy sports platforms immunity from criminal prosecution subject to the compliance with the guidelines and other applicable laws.

Advertisement Guidelines: transparency and consumer rights

The Advertisement Standards Council of India (“ASCI”) released certain guidelines on advertisements on online gaming on 4 December 2020 (“ASCI Guidelines”)[11]. The ASCI Guidelines came into effect from 15 December 2020.

Under the ASCI Guidelines, all advertisements relating to gaming should contain certain mandatory disclosures and statements (whether such advertisement are in print or audio/ video format) such as; (i) the game involves financial risk and may be addictive and that the players should play at their own risk; (ii) the advertisement should not present online gaming for real money winnings as an income opportunity or an alternative employment option; (iii) the advertisement should not suggest that a person engaged in gaming activity is more successful as compared to others; and (iv) the advertisements should not depict any person below the age of 18 years or who appears to be below 18 years of age, engaged in the game of online gaming for real money winnings or suggest that such persons can play these games.

Further, online fantasy sports platforms are also required to follow the draft guide2lines for Advertising on Digital Media (“Influencer Guidelines”) issued by the ASCI on 22 February 2021. Considering the impact of influencers on consumers, the Influencer Guidelines suggests certain standards to be followed by influencers. These standards include specific disclosures of the nature of posts by making a prominent labelling of each digital media posts, restriction on use of filters which would exaggerate the effect of claims being made and further directs influencers to conduct due diligence about any tech or performance claims made by them. The Influencer Guidelines also provide the specifications of labelling or disclosures to be followed in picture posts, video posts and audio posts.

These guidelines have been prescribed so that an accurate or correct information regarding the financial and other risks associated with online games are portrayed to the consumers.

Way forward

The guidelines proposed by NITI Aayog are a positive step in promoting the growth of this industry. Considering the significant increase in number of mobile users with internet access in India, there is a tremendous potential for growth of online fantasy sports industry in India. A proactive approach by the Government in formulating a uniform set of regulations, and single regulator to oversee this industry in conjunction with the guidelines framed by ASCI, will provide substantial confidence amongst the developers and investors and at the same time provide adequate framework for dissemination of adequate information and risks to the users / players.

As there is a huge potential for positive impact on the economy, it is expected that the Government will undertake active steps to promote the growth of this industry in India.

Disclaimer: The information contained in this document is not legal advice or legal opinion. The contents recorded in the said document are for informational purposes only and should not be used for commercial purposes. Acuity Law LLP disclaims all liability to any person for any loss or damages caused by errors or omissions, whether arising from negligence, accident or any other cause.





5.     Judgement dated 9 April 1957 in Civil Appeal No. 134 of 1956.

6.     Judgement dated 12 January 1996 in W.P(C) Nos.726, 1361 of 1986, 1053/87, 1028/86, 666/86, 1067/86, 1491/86, 923/86, I.A.3/92 in W.P(C) No.857/86, C.A.1715/75, CMP No.21945/86, 14162/86, 20859 & 24540 of 1986.

7.     Judgement dated 18th April 2017 in CWP No. 7559 of 2017.

8.     Judgment dated 30th April 2019 in Criminal P.I.L. No. 22 of 2019.

9.     Oder dated 6th March 2020 in Criminal S.L.P No. 42282 of 2019.