Dream11 Inc. (“Dream11”) takes great care to comply with central and state legislations in India and USA to protect users from any legal risk. All the fantasy sports games for cricket and football as available on our website, including the paid formats of the like (“Dream11 Games”), are carefully designed to comply with applicable statutes and regulations in India.
Games of Skill
Games can be broadly classified into the following two categories:
• Games of chance, where the winner is determined entirely by mere luck, the result is wholly uncertain and doubtful and a human being cannot apply his/her mind to estimate the result or his/her efforts to influence the result. Generally, such games are illegal as constituting gambling.
• Games of skill, where, skill plays the dominant role and the result depends primarily upon the relative knowledge, training, attention, experience, and/or adroitness of the participants. Generally, such games are not deemed to constitute ‘gambling’ and do not fall foul of the laws prohibiting gambling.
For a game to be considered a ‘game of skill’ under Indian law, the element of skill must predominate the element of chance in affecting the results of the game. Thus, the extent to which skill is involved in the game is the key factor in the determination of the nature and legality of the game under Indian law.
Accordingly, games such as Rummy, Chess, Carrom and Wagering on Horse Races have been recognised by the courts in India as games of skill.
Indian Law on Gambling
The principal legislation governing gambling in India is the Public Gambling Act, 1867 (“PGA”). The PGA criminalises the act of ‘gambling’ in a public forum and the keeping of a ‘common gaming house’. The PGA, however, creates an important exception in favour of games of skill, by stating that the provisions of the PGA shall [not] be held to apply to any ‘game of mere skill’ wherever played.
In determining whether a given game or contest is a game of skill or chance, Indian courts have adopted the standard of assessing the ‘dominant factor’ of a game. The two most important Indian cases in this regard are State of Andhra Pradesh v. K Satyanarayana (AIR 1968 SC 825) (the “Satyanarayana” case) and KR Lakshmanan v. State of Tamil Nadu (AIR 1996 SC 1153) (the “Lakshmanan” case).
In the Satyanarayana case, the Supreme Court defined a ‘game of mere skill’ to mean a game “in which, although the element of chance necessarily cannot be entirely eliminated, success depends principally upon the superior knowledge, training, attention, experience and adroitness of the player.” By application of this definition, the Supreme Court held that the game of rummy was a game of skill, and did not amount to gambling under the PGA. While upholding the levy of a nominal service charge for provision of a physical space, cards, etc., to play a game of rummy, the Court reasoned:
"Rummy...... requires certain amount of skill because the fall of the cards has to be memorised and the building up of Rummy requires considerable skill in holding and discarding cards. We cannot, therefore, say that the game of Rummy is a game of entire chance. It is mainly and preponderantly a game of skill."
In the Lakshmanan case, the Supreme Court held that the betting on horse races was a game of skill. It rationalised that in a horse race the winner is not determined by chance alone, as the condition, speed and endurance of the horse and the skill and management of the rider are factors affecting the result of the race. The bettor has the opportunity to exercise his judgment and discretion in determining the horse on which to bet.
Games of Skill and Fantasy Sports in the United States of America
The principal federal statute that deals with online fantasy sports in the U.S. is the Unlawful Internet Gambling Enforcement Act, 2006 (“UIGEA 2006”) which was enacted to combat internet gambling. The UICEA 2006 specifically exempts from its purview any fantasy sports games that “have an outcome that reflects the relative knowledge of the participants, or their skill at physical reaction or physical manipulation (but not chance), and, has an outcome that is determined predominantly by accumulated statistical results of sporting events, including any individual performances in such sporting events.” and satisfy the below criteria:
• All prizes and awards offered to winning participants are established and made known to the participants in advance of the game;
• The value of prizes is not determined by the number of participants or the amount of fees paid by those participants;
• All winning outcomes are based on the relative knowledge and skill of the participants and are determined predominantly by accumulated statistical results of the performance of individuals (athletes in the case of sports events) in multiple real-world sporting or other events; and
• No win is based on a point-spread or on one single performance in one single event. In other words, no winning outcome is based - (a) on the score, point-spread, or any performance or performances of any single real-world team or any combination of such teams; or (b) solely on any single performance of an individual athlete in any single real-world sporting or other event.
Dream11 Games – Games of Skill
In order to achieve success at the Dream11 Games a user must have knowledge (gathered through systematic research), attention, experience and adroitness. The ‘skill’ element of the Dream11 Games is found primarily in two aspects: drafting and playing. Users are subject to several carefully structured constraints and limitations in the game rules (which minimizes the instance of chance dictating the outcome) and are required to engage in a qualitative assessment of skills and relative worth of each player based on his strengths and weakness in light of the scoring criteria used by Dream11 and make a theoretical evaluation of the player’s prospective accumulated statistics over the course of the round at the time of drafting a fantasy team in a Dream11 Game. In order to succeed in the Dream11 Games, a user must apply his/her mind and judge the likely performance of each of his players in upcoming matches, and further the user is required to invest time and effort in analysing and tracking the performance of his players and other eligible players. For these reasons, the determination of the outcome in Dream11 Games is based on the predominance of skill over chance and it is our belief that the Dream11 Game is conclusively a game of skill in the eyes of the law. Accordingly, the Dream11 Games do not amount to ‘gambling’ under central and most state gambling statutes in India.
Apart from the PGA, which is a central legislation, several states across India have enacted and implemented State specific laws governing gambling, gaming and other similar or related activities. Where a state law on the subject exists, it supersedes the PGA.
While the PGA and most state statutes exempt games of 'mere skill’ from their purview, certain Indian states classify all games of mixed skill and chance as gambling regardless of whether skill is the predominant factor. In Assam and Orissa in particular, games of mixed chance and skill cannot be played for any monetary consideration. Therefore, unfortunately, we do not currently offer the paid formats of the Dream11 Games to residents of Assam and Orissa but do make available the ‘free-to-play’ formats of the Dream11 Games to such persons.
Assam and Odisha
With regard to Assam and Odisha, the laws in these states are unclear as to whether games of skill may be played for a fee. Therefore, currently, residents of Assam and Odisha are not permitted to play participate in the paid formats of the Dream11.com Fantasy Cricket & Football Game. Residents of Assam and Odisha may, however, participate in the ‘free-to-play’ version of the Dream11 Game.
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