2017 (4) TMI 1515 - HC - Indian Laws

Gambling - Horse Racing - whether a horse-race run on the turf of the club is a game of chance' or a game of mere skill ? - HELD THAT - Horse racing is an organized institution. Apart from a sport, it has become a huge public entertainment business. According to The New Encyclopaedia Britannica the occasion of certain races are recorded as public holidays. Derby day at Epsom where the public is admitted on two parts of the grounds at no fee has drawn as many as 5,00,000 spectators. Attendance at horse races in many countries is the highest or among the highest of all sports. The horses which participate in the races are a class by themselves. They have a history of their own. The breed of the horse is an important factor. The experts select the horses who are to be inducted into the racing profession. The selected horses are given extensive training by professional trainers. Breed, upbringing, training and the past record of the race - horses are prominently published and circulated for the benefit of prospective betters. Jockeys are experts in horse riding and are extensively trained in various aspects of horse-racing. They are supposed to know the horse they are riding and the turf on which the horse is to run. Gambling is not a trade and thus, is not protected by Article 19(1)(g) of Constitution of India and thus, the fantasy games of the respondent -company cannot said to be falling within the gambling activities as the same involves the substantial skills which is nothing but is a business activity with due registration and paying the service tax and income tax, thus, they have protection granted by Article 19 (1)(g) of Constitution of India. Resultantly, the questions are squarely answered in favour of the respondent company and no need to issue the direction against the respondents to settle the criminal law into motion - petition dismissed.

Issues Involved:
1. Applicability of the Public Gambling Act, 1867.
2. Determination of whether Dream11's fantasy sports games constitute gambling.
3. Examination of the element of skill versus chance in fantasy sports.
4. Legal protection under Article 19(1)(g) of the Constitution of India.

Issue-wise Detailed Analysis:

1. Applicability of the Public Gambling Act, 1867:
The petitioner sought directions to initiate criminal prosecution against the Respondent Company under the Public Gambling Act, 1867, alleging that the activities on their website constituted illegal gambling. The Court examined the applicability of Sections 11 and 12 of the Act, which indemnify witnesses and exempt games of mere skill from the Act's provisions. The Court concluded that the games offered by the Respondent Company do not fall under the purview of the Public Gambling Act, 1867, as they are games of skill.

2. Determination of whether Dream11's fantasy sports games constitute gambling:
The petitioner argued that the activities on Dream11's website were purely games of chance and thus amounted to gambling. The Respondent Company countered this by detailing the nature of fantasy sports games, emphasizing that they require material and considerable skills in drafting and managing virtual teams. The Court referred to the Supreme Court's judgment in K.R. Lakshmanan vs. State of Tamil Nadu, which established that games involving substantial skill are not considered gambling. The Court held that Dream11's fantasy sports games are games of skill and not gambling.

3. Examination of the element of skill versus chance in fantasy sports:
The Respondent Company provided a detailed explanation of the skill involved in playing fantasy sports games, including assessing the relative worth of athletes, studying rules, and making strategic decisions. The Court noted that the success in these games arises from the user's exercise of superior knowledge, judgment, attention, and adroitness. The Court concluded that the element of skill predominates over any incidental chance in Dream11's fantasy sports games, making them games of mere skill.

4. Legal protection under Article 19(1)(g) of the Constitution of India:
The Court observed that gambling is not protected under Article 19(1)(g) of the Constitution, which guarantees the right to practice any profession or carry on any occupation, trade, or business. However, since Dream11's fantasy sports games are games of skill, they constitute a business activity protected under Article 19(1)(g). The Court recognized that the Respondent Company operates with due registration, pays service tax and income tax, and thus is entitled to constitutional protection.

Conclusion:
The Court dismissed the writ petition, holding that Dream11's fantasy sports games are games of skill and not gambling. Consequently, the provisions of the Public Gambling Act, 1867, do not apply to the Respondent Company's activities. The Court affirmed that the Respondent Company's business is protected under Article 19(1)(g) of the Constitution of India.

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