The high court for the northern Indian states of Punjab and Haryana ruled that daily fantasy sports should not be considered gambling. The court ruled that daily fantasy sports requires skill and judgment in order to succeed.
Most forms of gambling are illegal in India, though that is changing. PokerStars signed a deal to enter the Indian gaming market earlier this year, while the State of Goa has a growing brick-and-mortar casino industry. Punjab and Haryana bans gambling, but decided that DFS does not fit under its definition of a game of chance.
The ruling is in response to a lawsuit filed by Varum Gumber, a disgruntled fantasy sports player, according to The Times of India. Mr. Gumber, described as a resident of Chandigarh, lost $784 on two separate DFS competitions: one involving cricket and the other involving football (soccer).
Varum Gumber Filed DFS Lawsuit
Varum Gumber wanted the court to rule that daily fantasy sports was illegal, because it was a game of chance. He asked for his entry fees to be refunded to him and the owner of FantasyCricket.Dream11.com, the daily fantasy sports website on which he played, to be prosecuted for running an illegal gaming operation.
Lawyers for Mr. Gumber argued that the “Fantasy Cricket Dream 11” is illegal under the Public Gambling Act of 1867, which governs the gambling laws of India. Most forms of gambling are banned under the terms of the Public Gambling Act of 1867, which is one of the oldest statutes against gambling in the world .
Daily Fantasy Sports Involved “Substantial Skill”
The high court ruled against Gumber, saying that playing daily fantasy sports cannot be defined as gambling, because it requires “substantial skill”. In the United States, roughly 90% of winnings in daily fantasy sports are collected by professional players colloquially named as “grinders”, because they play a mass number of games and used advanced statistical analysis to gain an advantage.
The court additionally ruled that daily fantasy sports sites which pay services and income taxes are considered a “business activity”, so they are protected under Article 19 of the Indian Constitution. The ruling should be an important legitimization of the online daily fantasy cricket and soccer industries in India — at least in the states of Punjab and Haryana.
Ruling Covers a Region of 52 Million Residents
Haryana is one of the wealthiest states in India, as it is listed as having the third-highest per capita income of any Indian state. Haryana also has over 25,000,000 inhabitants, making it more populous than the entire nation-continent of Australia.
Punjab has over 27,000,000 residents. Punjab is the birthplace of Sikhism and is the only Sikh-majority state in India, with over 57% of its inhabitants practicing Sikhism. While Punjab is known for its agriculture, it also hosts industries involving financial services, scientific instruments, machine tools, and electrical goods.
Gambling Is Not a Profession
The high court did not give Article 19 protections to those who play daily fantasy sports. It ruled that gambling is not a profession, so gamblers do not receive Article 19 protections under the Constitution of India.
Opinion by Justice Amit Rawal
Justice Amit Rawal wrote a 29-page majority opinion, explaining the decision. Justice Rawal wrote that Varum Gumber made an intentional act to create a team and compete, so he should be held accountable for that action.
Rawal wrote, “[The] petitioner himself created a virtual team of a cricket match between two countries by choosing players, who were to play for two countries collectively and, after forming a virtual team as per his own selection, knowledge and judgment, which is thoughtful will.”
The justice noted that Varum Gumber also was aware that the contest he joined was competitive, and not everyone won. He was aware of the risks involved. Rawal noted, “[The petitioner] joined various leagues [contests] after registration, which was declared before participating, was not about the possibility of winning or losing, like horse riding, as not every bettor is winner.”
Public Gambling Act of 1867
It is astounding that the Public Gambling Act of 1867 still governs the gambling laws of India. That act was put in place during the British Raj, and therefore was formulated by British officials. Australia currently is updating its 2001 Interactive Gambling Act because it is considered out-of-date, due to technological advances. That India still applies online gambling laws written in the era of the telegraph is remarkable.
At the same time, India’s high court appears capable of sound application of the 1867 law to daily fantasy sports. In fact, India’s justices appear to understand “games of skill” like poker and daily fantasy sports better than many judges and legislators in the United States. Despite having laws written in the past 11 years, American online gaming laws are more backward than the laws of Punjab and Haryana.