On Friday, the Rajasthan High Court dismissed the petition filed in the nature of Public Interest Litigation by observing that the said PIL holding the online fantasy sports game of “Dream 11” is a game of mere skill and does not involve in the offence of gambling/betting.
In the present PIL, the allegations made by the petitioner is that the private-respondent no. 5 is not paying GST under proper classification. According to the petitioner, out of every 100/- received by the private respondent no. 5 from the participants, 80/- are set aside in an escrow account for the common price pool and the same is distributed amongst the winners and on such sum no GST is paid which, is being paid on the remaining amount retained as platform fee i.e., 20/-. The petitioner also alleges that even on the said actionable claim amount of 80/- kept in the escrow account and distributed amongst the winners, GST should be payable by the private respondent No. 5 that too @28%.
Earlier, it was asserted that the virtual games are games of chance; thereby constituting illegal act of gambling/betting and further alleged that government authorities are not prohibiting the same.
The matter observed by the Bench of Hon’ble Chief Justice Indrajit Mahanty and Hon’ble Justice Mahendra Kumar Goyal is that:
“since the result of fantasy game depends on skill of participant and not sheer chance, and winning or losing of virtual team created by the participant is also independent of outcome of the game or event in the real world, we hold that the format of online fantasy game offered by the respondent no. 5 is a game of mere skill and their business has protection under article 19(1)(g) if the constitution of India, as repeatedly held by various courts and affirmed by the Hon’ble Supreme court.”
Further, the present PIL seeks action against the private respondent No.5 – Dream 11 by raising two issues, namely:-
(1) Whether online fantasy sports games offered on Dream 11 platform are “gambling/betting”?
(2) Whether respondent No.5-Dream 11 is wrongly classifying its virtual online game under the wrong entry for GST and, therefore, violating Rule 31(A) (3) of the CGST Rules, 2018 in order to evade GST?
For the aforesaid 1st issue, in the case of State of Bombay Vs. R.M.D. Chamarbaugwala & Anr., AIR 1957 SC 699, the Hon’ble supreme court held that the games of skill are distinguishable from gambling and enjoy protection under Article 19(1) (g) of the Constitution of India. In the present PIL, the court considered the important aspects of the fantasy games offered by respondent No.5 is not determined merely by chance or accident, but the skill of the participant determine the result of the game having predominant influence on the outcome of the fantasy game. Whether any particular team in the real world match wins or loses, is also immaterial as the selection of virtual team by the participant involves choosing players from both the teams playing in the real world. It is also clear that offering the fantasy games of Dream-11 involving substantial skills is a business activity and not wagering having protection granted by Article 19(1)(g) of the Constitution.
The High Court also agreed on the submission made by respondent No.5 is that the fantasy sports formats like that of Dream-11 are globally recognized as a great tool for fan engagement, as they provide a platform to sports lovers to engage with their favourite sports along with their friends and family. This legitimate business activity having protection under Article 19(1)(g) of the Constitution contributes to Government Revenue not only vide GST and income tax payments, but also by contributing in increased viewership and higher sports fan engagement, thereby simultaneously promoting even the real world games.
Therefore, in view of the above averments, the court has concluded that the fantasy games played on the Dream 11 platform does not involve gambling/betting activity and thus, the court decided in favor of ‘Dream 11 fantasy Pvt. Ltd.’
Wherein, on the Second Issue, the court referred the Bombay High Court ruling case of Gurdeep Singh Sachar v/s. Union of India (Criminal PIL. No. 16/2019), both the issues, as raised in the instant PIL, were raised and by a detailed judgment dated 30.04.2019, it was pleased to dismiss the said PIL holding that :
“The online fantasy cricket of respondent No.5 was a game of mere skill, as distinguished from a game of chance. The Dream-11 fantasy game does not involve risking money or playing stakes on the result of a game or an event, hence, the same did not amount to gambling/betting. The Bombay High Court also held that respondent No.5 is correctly paying 18% GST by classifying its services under entry 998439 and is not liable to pay GST @ 28% as applicable to ‘online (Downloaded on 18/10/2020 at 01:20:15 PM) (12 of 20) [CW-20779/2019] gambling services’ under entry 999692 and that Rule 31-A(3) of the CGST Rules, 2018 was not applicable as the said actionable claim as per Schedule III and Section 7(2) of the Act, are not considered as ‘supply of goods’ or ‘supply of services’ and, therefore, the authorities have rightly not taken steps against Dream-11.”
However, in light of the above findings on the issue of gambling/betting, The Court appropriate to leave the said second issue for the GST authorities to consider in accordance with law. Therefore, the Rajasthan High Court considered the view that PIL has been filed without any real public interest, without disclosing the relevant facts, and without proper research. The PIL is misconceived. And Consequently, the court finds no merit in the instant PIL petition, and the same is accordingly dismissed with costs.
In conclusion it can be said While policy proposals are still pending in India’s Parliament, the best online gamblers can do is to wait and make sure that they are playing at legitimate sites. It is advisable to go over reviews and rankings of online casinos that operate in India. Relying on search engines to find a good online casino is not a good idea.
Determining, for example, Playing roulette for rupees is the right choice is the right choice & is not that difficult with the help of online casino review sites. There are ratings and detailed information about the different gambling site options available in India. Players need to spend some time reading the reviews.
With many now advocating for online gambling regulation in India, the possibility of a federal online gambling law is no longer that distant. It may take some time, but legislators are unlikely to defy the growing support for regulation. Relevant gambling legislation helps protect customers or players from abusive online casinos. At the same time, it provides the legal framework to collect taxes and other possible revenues such as licensing fees.
