While fighting its way through a number of regulatory challenges, Dream11 has
emerged as India's premier online fantasy sporting platform. The fantasy
platform was founded back in 2008 by a couple of Indian entrepreneurs, who saw
the potential of bringing this phenomenon of fantasy gaming to India.
on to launch Freemium Fantasy Cricket in 2012, which became their flagship
product, paving their way to success. The platform has been on the rise ever
since navigating through the regulatory grey area in terms of its legality to
bagging the title sponsorship of one of the biggest cricket tournaments in the
world; The Indian Premier League.
Legality of the Platform
The question on the legality of Dream11 was first brought up when a case was
filed against the online fantasy sports platform initiating criminal proceedings
in the Punjab and Haryana High Court in 2017. The petitioner contended that the
nature of the activities offered on the platform were not based on any skill but
were purely a game of chance and thus clearly amounting to gambling prohibited
under the Public Gambling Act, 1867.
Dream11 opposed to the arguments of the petitioner by elucidating the platform
and the requirement of considerable skills by the user in drafting
virtual team and 'playing' fantasy sports game. After considering the
contentions raised by both the parties and relying on the K.R
Lakshmanan judgment, in which the Apex Court had previously deemed horse
racing to be a game of mere skill on similar grounds, the PandH High Court opined
that playing a fantasy sports game required the same degree of skill, judgment
and discretion as in the case of horse racing.
The Hon'ble High Court held that playing of a fantasy game by any participant
user involves making a virtual team by him, which would certainly require a
considerable amount of skill, judgment and discretion. Furthermore, the user has
to evaluate the relative worth of each athlete/sportsperson as against all
athlete/sportsperson available for selection and is also required to study the
rules, regulations, strength and weaknesses of the athlete or player.
The Hon'ble High Court was further of the view that the element of skill and
predominant influence on the outcome of the Dream11 fantasy are just as much as
any other factors. Therefore, the Hon'ble High Court held that any sports game
that constitutes the game of mere skill will not fall under the activity of
gambling for the invocation of Public Gambling Act, 1867. The decision of the
Hon'ble High Court was challenged before the Supreme Court. However, the
petition was dismissed upholding the decision of the PandH High Court.
One of the biggest pros for Dream11 is that it has been exempted from the
provisions of the Public Gambling Act, 1867 as it constitutes a 'game of mere
skill'. Section 12 of the Public Gambling Act, 1867 states that nothing in
the act shall apply to any game of mere skill wherever played. Hence, it does
not amount to gambling under the Public Gambling Act, 1867 and the same was
further held in the landmark judgment by the Punjab and Haryana High Court. The Hon'ble High Court also held that Dream11 is a legitimate business activity
protected under Article 19(1)(g) of the Constitution of India.
After the Punjab and Haryana High Court case, the fantasy platform saw more
challenges coming its way. A Public Interest Litigation (PIL) was filed in the
Bombay High Court in 2019 seeking directions to initiate criminal prosecution
against Dream11 for allegedly conducting illegal operations of
gambling/betting/wagering in the guise of online fantasy sports gaming. It was
also alleged that evasion of Goods and Service Tax (GST) payable by the platform
is done by violating the provisions of Goods and Service Tax Act and that it
should be determined according to the value of supply in case of lottery,
betting, gambling and horse racing as determined in Rule 31A of CGST Rules,
The Hon'ble High Court quashed the PIL recapitulating the decision of the Punjab
and Haryana High Court that the activities performed by Dream11 do not amount to
'gambling', even as per the Public Gambling Act, 1867. With respect to the
matter of taxation, the Hon'ble High Court held that the allegation of the
petitioner regarding GST evasion or erroneous classification is also directly
based on the outcome of the above first issue. Only, if their Online Fantasy
Sports Gaming is 'gambling' or 'betting', there is a scope to infer possibility
of any tax evasion.
Even after the above-mentioned judgments and SLPs in relation to these
judgments, another challenge was filed before the Rajasthan High Court in
2020 against the fantasy platform alleging it to be betting of cricket team and
amounting to gambling. The Hon'ble High Court reaffirming the decision of the
Punjab and Haryana High Court and Bombay High Court held that the question of
treating the online fantasy game "Dream 11" as having any ingredient of
betting/gambling is no more res integra (untouched matter; a point without a
precedent). The Hon'ble High court further stated that the Special Leave
Petitions have also been dismissed against the orders of these High Courts.
The Bridge between Dream11 and the Indian Premier League
Vivo being a Chinese smartphone manufacturer, deferred the contract for this
year following a public backlash against Chinese companies amidst the ongoing
Sino-India border dispute. Dream11 grabbed this opportunity and bagged the
Indian Premier League title sponsorship in August 2020 with a three-year winning
bid of Rs. 222 Cr.
However, this bid is subject to Vivo's return next year. In the light of the
border dispute and the recent amendments made by the government in the Foreign
Direct Investment (FDI) Policy, the BCCI highlighted that:
is an Indian start-up with a single-digit Chinese investment that is negligible
and can be resolved internally.
The Government of India (GOI) vide its Press
Note No.3 (2020 Series) dated 17th April 2020 stated that all investments by
any country that shares land border with India will require prior approval of
the GOI. It further stated that even in the case of any transfer of an existing
or future FDI, prior government approval will be required.
If Vivo returns as the title sponsors next year then Dream11 will have to make
way. However, if Vivo does not return as the title sponsors, Dream11 will hold
the title rights till the 2022 edition. The winning bid of the title sponsorship
is set at an average of Rs 234 Cr per year.
This journey from being a global phenomenon with the potential of succeeding in
the Indian market navigating through the regulatory challenges and now being the
face of Indian gaming start-ups, Dream11 has come a long way. However, the legal
challenges still persist, as recently a Special Leave Petition against the
Bombay High Court judgment was filed before the Apex Court by The State of
Maharashtra challenging the erstwhile judgement of the Bombay HC. The Supreme
Court has passed an order of stay against the said judgment until further
Therefore, now having proved that the model is viable and welcomed in the Indian
market, if Dream11 can face the legal challenges in the manner it has faced in
the past, the Indian Premier League (IPL) is just one of the many leaps in this
- Dr. K.R. Lakshmanan vs State Of Tamil Nadu And Anr on 12 January, 1996,
1996 AIR 1153, 1996 SCC (2) 226
- Shri Varun Gumber v. Union Territory of Chandigarh and Ors., CWP No.
7559 of 2017.
- Gurdeep Singh Sachar Vs.Union of India and Ors.
- Chandresh Sankhla Vs.The State of Rajasthan and Ors.