It is a game of skill: Rajasthan High Court rejects plea to ban Dream11

Court says games offered on platform involve skill, not chance; rules that issue of GST evasion, as alleged in the plea, will be decided by GST authorities

India's gaming industry heats up as investors court fantasy sports firms
Representative image | Dream11 is an Indian fantasy sports platform that allows users to play fantasy cricket, hockey, football, kabaddi and basketball

The Rajasthan High Court has dismissed a petition seeking a ban on Dream11 claiming the fantasy sports platform amounted to betting or gambling. The court said “the format of online fantasy game is a game of mere skill”.

The petition also accused Dream11 of evading the goods and services tax (GST) since it is paid on the 20 per cent sum retained by the company and not on the entire amount. The court said this issue will be decided by the GST authorities.

The Dream11 platform allows users to play fantasy cricket, hockey, football, kabaddi, and basketball.

Abhishek Jain, partner at EY, said the petitioner alleged the virtual gaming is nothing else but "betting" on the cricket team. It further alleged that online fantasy sports are games of chance, thereby constituting an illegal act of gambling, betting, and the department of revenue is not prohibiting this illegal game.

Dismissing the plea, the court said: "The result of fantasy game depends on skill of participant and not sheer chance, and winning or losing of the virtual team created by the participant is also independent of the outcome of the game or event in the real world; we hold that the format of online fantasy game is a game of mere skill and it has protection under Article 19 (1) (g) of the Constitution."

This article guarantees freedom to practise any profession, or to carry on any occupation, trade or business.

Dream11 allows users to form their own team. At the time of registration, the user has to make a payment of Rs 100, of which 20 per cent is retained by Dream11 company and the rest 80 per cent is pooled up for the transfer of the amount to the winner of the fantasy tournaments.

The petitioner alleged that the GST is paid on only 20 per cent and not the entire amount. The court left this issue to be decided by the GST authorities in accordance with the law. Jain said: "The position of the Rajasthan High Court strengthens the position adopted by industry players in the world of fantasy sports games."