Dream 11 not a game of chance, does not amount to gambling: Bombay HC

The Bombay High Court has held that online fantasy sports game Dream 11 is a game of skill and not a game of chance. Therefore, it does not amount to gambling..The observation was made while dismissing a PIL to initiate criminal proceedings against Dream 11 Fantasy Pvt Ltd. The High Court also found no merit in allegations of tax evasion by Dream 11..Echoing the Punjab & Haryana High Court’s 2017 judgment which had dismissed a similar plea, the Bombay High Court held,.“It can be seen that success in Dream 11’s fantasy sports depends upon user’s exercise of skill based on superior knowledge, judgement and attention, and the result thereof is not dependent on the winning or losing of a particular team in the real world game on any particular day. It is undoubtedly a game of skill and not a game of chance.“.The Division Bench of Justices Ranjit More and Bharati Dangre heard the PIL filed by advocate Gurdeep Sachar. Advocate Sujay Kantawala, appearing for the petitioner, claimed that the promoters of the game were encouraging gambling and were not paying taxes..The petitioner contended that fantasy games are nothing but a means to lure people to spend their money to make quick earnings by taking chances. He further argued that most people end up losing their money in the process..Senior Advocate Vikram Nankani instructed by Nikhil Rungta appeared for the promoters of Dream 11. He argued that there was no gambling or betting involved as the game requires participants to make a studied decision to select players in their team before match day..Relying on the findings of the Punjab & Haryana High Court, it was further pointed out that since the process of choosing a team did not involve any service, the question of paying Goods and Services Tax (GST) did not arise. It was also noted that the Special Leave Petition filed against this verdict was dismissed by the Supreme Court in 2017..After perusing submissions made by both the sides, the Court primarily dealt with two issues:.Whether the activities of the promoter of Dream 11 amount to ‘Gambling’\’Betting’?Whether there is any merit in the allegation of violation of Rule 31A(3) of CGST Rules, 2018 and erroneous classification?.The Bombay High Court rejected the claims of gambling or betting against Dream 11. It held,.“The petitioner has lost sight of the fact that the result of the fantasy game contest on the platform of Dream 11 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.”.While drawing parallels to the judgment of the Punjab & Haryana High Court, the Bombay High Court went on to conclude,.“In these circumstances, there is no plausible reason to take a contrary view than that taken by the Hon’ble Punjab and Haryana High court, which judgment has already been upheld by the Hon’ble Supreme Court in the Special Leave Petition.”.The Bench also dismissed the petitioner’s claim of tax evasion holding that the issue would arise only if the promoter’s game involved gambling. The Court in its order said,.“The allegation of the petitioner regarding GST evasion or erroneous classification is also directly based on the outcome of the first issue. Only, if their Online Fantasy Sports Gaming is ‘gambling’ or ‘betting’, there is a scope to infer possibility of any tax evasion.”.Before parting with the case, the Court also remarked that the attempt to reopen issues that have already been settled by earlier decisions is wholly misconceived. It, therefore, dismissed the case as wholly untenable and without any merit..[Read Judgment].Bar & Bench is available on WhatsApp. For real-time updates on stories, Click here to subscribe to our WhatsApp.