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Here’s why a former SC judge thinks banning online fantasy sports is a bad idea

While states like Tamil Nadu and Karnataka are considering bans on real money gaming, Indian courts have ruled the other way.

“The challenges which are still faced by fantasy sports is a matter of concern. It appears that even when there are authoritative pronouncements, some States or state legislatures are still thinking that no, such a game is to be prohibited,” former Supreme Court judge Arjan Kumar Sikri said in remarks at the Federation of Indian Fantasy Sports’ GamePlan 2021 event. Sikri is the FIFS’s ombudsman. In his remarks during the event, he castigated state legislatures in India for classifying fantasy sports as gambling through a “legal fiction,” and attempting to prohibit them.

This comes in the aftermath of the Supreme Court refusing to even consider appeals to ban real money gaming — the courts have said that wagering real money on online fantasy sports or other such services cannot constitute gambling if they rely on players’ skill. This has not dissuaded states such as Tamil Nadu, who have had prohibitions on such sites overturned in the recent past. This speech is also important in the context of the government writing to Andhra Pradesh’s Chief Minister that it is exploring a uniform approach to regulating such games.

‘Matter is res integra’

  • Gambling can be prohibited, but… “Since betting and gambling are treated as the activities which are not in general public interest, restrictions can be there on [these activities], and they can be prohibited also; to that extent, state legislatures have acted too,” Sikri said. “But the Supreme Court has interpreted this provision by drawing a distinction between the game of skill or game of chance,” he added.
  • What is betting and gambling? “There are many judgments of the Supreme Court which have been given from time to time distinguishing the game of skill from the game of chance,” Sikri said. “And if it is a game of skill and it is not betting or gambling, obviously state legislature would not have power under Entry 34 [of the Constitution’s seventh schedule] to make laws in respect of that because it talks of betting and gambling.”
  • Courts say fantasy gaming not gambling: “Now, fortunately, we have three judgments from high courts, and to some of these judgments, an imprimatur, an authoritative stamp of approval from the Supreme Court, has been received,” Sikri said. “One is from the Bombay High Court, the others are from the Punjab & Haryana High Court and the Rajasthan High Court. All three have stated in the context of these online fantasy sports itself, that this is a game of skill. It is not a game of chance.”
  • No longer debatable: “Therefore it is not a gambling or it is not betting. And as I said, the Supreme Court has dismissed at least two Special Leave Petitions and in recent last month only against the judgment of Rajasthan High Court, while dismissing the SLP, the Supreme Court has gone to the extent of saying that the issue is no more res integra. It is not a debatable issue anymore,” Sikri said.

Doctrine of proportionality: Sikri said that while restrictions on such games can be introduced, they have to be reasonable. “The Supreme Court has laid out the yardstick defining reasonable restrictions; and that is what we call the doctrine of proportionality. And what is the doctrine of proportionality? It states that when a person is [exercising] a fundamental right, then a law which is enacted to regulate it has to be proportional,” he said. “And what are the test of proportionality? Number one, that it was absolutely necessary in the public interest, as I said, but I am using the expression in doctrine of proportionality, absolutely necessary means: there was no other alternative at all but to enact this law, because you are pertaining the freedom of a person. […] So therefore, I think the state legislature before stepping in should realize, when the game is treated as a game of skill, it’s a sports game. It’s not gambling. If you treat it as gambling by legal fiction — would it not contravene the doctrine of proportionality?”

Courts strike down bans on fantasy sports

Online fantasy sports and other platforms like poker and rummy apps have grown enormously in recent years. States have varied in their reactions to these services, which operate nationally but are subject to state law (the Constitution assigns regulation of “betting and gambling” to states). The platforms have, however, obtained rulings from the Supreme Court and multiple High Courts that prevent states from resorting to extreme steps, like prohibition.

Andhra Pradesh passed a law banning real money gaming altogether; Uttar Pradesh has announced plans to do so too. Karnataka is reportedly planning to introduce regulations for online gaming, but this draft has not been placed in the public domain. Some North Eastern states have either set up a licensing framework for real money gaming or permitted them more liberally:

  • Nagaland has put in place a licensing system for games of skill, including those that are stakes-based
  • Sikkim amends its gaming and gambling laws regularly to govern bet- and stakes-based gaming
  • Meghalaya has fully legalised games of skill and games of chance as well

Update (4:20pm): This post has been updated following editorial inputs.

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