TMI Blog2017 (4) TMI 1515X X X X Extracts X X X X X X X X Extracts X X X X ..... xtensively 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. - CWP-7559-2017 - - - Dated:- 18-4-2017 - Mr. Amit Rawal, J. For the Petitioner: M.S. Virk, Advocate. For the Caveator: G.S. Bedi, Advocate. For the Respondent-U.T.: Suvir Sehgal, Advocate. JUDGMENT In the instant petition directions for setting criminal law into motion against Respondent Company are sought, by an Advocate residing in the jurisdiction of this Court, cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties offered on the said website that they were not based on any skill, but were purely a game of chance and thus they clearly amount to gambling prohibited under the Public Gambling Act, 1867. The petitioner submits that it is falsely claimed that the activities are skill-based games. The Petitioner, before filing the writ petition, had given a legal notice, dated 14.03.2017 to the Respondent Company for suo-moto blocking of their website, to stop the illegal gambling activities and to refund of the amount paid by the petitioner. A detailed response denying all the allegations in the said notice, had been given by the Respondent Company, who are on caveat, which has also been placed on record before the Court. Respondent Company had claimed in their response to the Notice that their activities do not amount to 'gambling' punishable under the provisions of Public Gambling Act, 1867. The petitioner however submits that the said response is devoid of any merits and is misleading. From the peculiar facts, a clear case of violation of the provisions of Public Gambling Act, 1867 is made out. The learned Counsel for the Respondent Company submits that to the legal notice issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o study the rules and made evaluations of the athlete's strengths and weaknesses based on these rules. d) Further, a user's virtual team cannot be entirely or substantially consists of athletes from a single reals-world team. In the case of fantasy cricket and fantasy football games, the Dream11 rules stipulate that not more than 7 of the 11 athletes in the virtual team may be from a single real world team. This stipulation ensures that the user has to exercise greater skill in acquainting himself with the athletes of both participating real-world teams in a single match and prevents a user from creating a circumstance resembling the act of betting on the performance of a single team to win the match/league. e) As per the mechanism for the election of a virtual team in Dream11's fantasy sports game, each virtual player available for drafting into a virtual team is attributed a value in credit points and each user's virtual team is prescribed a maximum budget in points. Dream 11 specifies the price of drafting a virtual player based on the player's relative value and ability. Thus, any selection decision by a user in drafting a virtual team must also consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must also overcome team biasenes and prejudices while selecting athletes. For example, the user must avoid overrating athletes that play for his favorite team and underrating other athletes because they play for a disfavored team. The user must develop a strategy to create a team that is balanced in manner consistent with the user's overall strategy with a focus on winning fantasy points. g) The online fantasy spor games offered by them through the Platform require material and considerable skills in terms of 'drafting' and 'playing' which are the determinative factors in the results of the game and winning outcomes thereby. Element of skill predominant requiring exercise of superior knowledge, judgment, attention and adroitness: h) Once a virtual team is drafted, the user must interact with the game on a regular basis by monitoring the scores accumulated by the athletes drafted by him, as well as the general performance of teams, surveying other athletes for substitution and making substitutions where he deems fit but only during the given time-frame. i) The success in Dream11's fantasy sports games arises out of a user's exercise of superior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar with the Dream11 fantasy sports game or unsure of their cricket knowledge to learn the Fantasy Cricket game by visiting the Dream11 'Help' section, and further encourage them to participate in 'practice games' offered by Dream11 through the Platform, which are free-to-play. Through these measures Dream11 actively supports its users in their endeavour to train themselves and exercise their knowledge, judgment and skill to the best of their abilities in the course of participation in any fantasy sports games offered by Dream11 or any other service provider. Attribution of points: l) The points are attributed in a transparent and verifiable manner to the virtual analogues of real world athletes on the basis of the statistical elements of the real world athlete's performance in the real-world sports event. m) In the cricket fantasy sports game, points are attributed to the virtual analogue on the basis of, amongst others, the real-worlds player's selection in the starting eleven of the real-world team, number of runs scored, wickets taken, catches taken, stumpings/run-outs caused, batting strike rate and bowling economy rate with additional bonus points ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... state and record that Dream11 is transparent and open its in interaction with its users, and clearly defines and contractually documents the terms of its service provision through the Platform and thus your claim in the notice that you have been deceived in any way by Dream11 is false and without basis. Administrative Fees / charges, and distribution from price money pool: r) Dream11 is engaged in operating the Platform and offering users the opportunity to participate in fantasy sports games on such Platform, and limits its fees and charges for such participation to an administrative fee. Each fantasy sports game offered on the Dream11 Platform comprises of a game in which participating users are engaged in competing against other participating users for the cumulative price money pool available to such participating users from the amounts paid by each of them after excluding the aforesaid administrative fees. The invoices issues to the petitioner clearly shows this accept. This entire amount of the cumulative price money is collected and held by Dream11 in trust of the game and is, upen announcement of the results of the fantasy sports game, distributed in a transparent and ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been debated upon in K.R.Lakshmanan's case (supra) as aforementioned provisions of 1867 Act are pari materia to the provisions of Section 11 of the Madras Gaming Act, 1930 and the skill constitutes a game in which primarily the success depends upon the superior knowledge, training, attention, experience and adroitness of the player, in essence, the skill dominates over the element of luck/chance. It has been held that the expression mere skill would mean substantial degree or preponderance of skill. By taking into the aforementioned expression into consideration, it was held that the horse racing is not gambling and is a game of skill. The relevant paragraphs 9 and 17 to 23 of the judgment reads as under:- 9. On the same day when this Court decided Chamarbaugwala's case, the same four-Judge Bench presided over by S.R. Das, Chief Justice, delivered judgment in another case between the same parties titled R.M.D. Chamarbaugwala Anr. vs. Union of India Anr. AIR 1957 SC 628. The validity of some of the provisions of the Prize Competitions Act (42 of 1955) was challenged before this Court by way of petitions under Article 32 of the Constitution. Venkatarama Ayyar J. speaki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cess depends to a substantial extent on skill and competitions in which it does not so depend, form two distinct and separate categories. The difference between the two classes of competitions is as clear- cut as that between commercial and wagering contracts. On the facts there might be difficulty in deciding whether a given competition falls within one category or not; but when its true character is determined, it must fall either under the one or the other. The distinction between the two classes of competitions has long been recognised in the legislative practice of both the United Kingdom and this country, and the Courts have, time and again, pointed out the characteristic features which differentiate them. And if we are now to ask ourselves the question would Parliament have enacted the law in question if it had known that it would fail as regards competitions involving skill, there can be no doubt, having regard to the history of the legislation, as to what our answer would be. The conclusion is therefore inescapable that the impugned provisions, assuming that they apply by virtue of the definition in S.2(d) to all kinds of competitions, are severable in their application to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se to which we were referred. The three card' game which goes under different names such as flush', brag' etc. is a game of pure chance. Rummy, on the other hand 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. The chance in Rummy is of the same character as the chance in a deal at a game of bridge. In fact in all games in which cards are shuffled and dealt out, there is an element of chance, because the distribution of the cards is not according to any set pattern but is dependent upon how the cards find their place in the shuffled pack. From this also it cannot be said that Rummy is a game of chance and there is no skill involved in it. 18. The judgments of this Court in the two Chamarbaugwala cases and in the Satyanarayana case clearly lay-down that (i) the competitions where success depends on substantial degree of skill are not gambling' and (ii) despite there being an element of chance if a game is preponde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dition, Volume 5 at page 105, while defining the expression gambling refers to horse racing as under:- Betting on horse racing or athletic contests involves the assessment of a contestant's physical capacity and the use of other evaluative skills. . 21. Volume 6 of the Encyclopaedia at page 68 onwards deals with the subject of horse-racing. Thoroughbred horses with pedigree are selected and trained for races. Horse-racing is a systematic sport where a participant is supposed to have full knowledge about the horse, jockey, trainer, owner, turf and the composition of the race. It would be useful to quote an extract from the Encyclopaedia:- Horse racing, sport of running horses at speed, mainly, Thoroughbreds with a rider astride or Standardbreds with the horse pulling a conveyance with a driver. These two kinds of racing are called racing on the flat and harness racing. Some races on the flat involve jumping...... Knowledge of the first horse race is probably lost in prehistory. Both four- hitch chariot and mounted (bareback) races were held in the Olympic Games of 700-40 BC. Other history of organized racing is not very firmly established. Presumably, organized rac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt 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. 23. Judicial pronouncements on the subject are primarily of American Courts. In People of Monroe 85 ALR 605, it was held that the pari-mutuel betting on the result of horses races, did not violate a pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horse riding not every better is winner. The respondent company' s website and success in Dream 11's fantasy sports basically arises out of users exercise, superior knowledge, judgment and attention. I am of the further view that the element of skill and predominant influence on the outcome of the Dream11 fantasy than any other incidents are and therefore, I do not have any hesitation in holding the any sports game to constitute the game of mere skill and not falling within the activity of gambling for the invocation of 1867 Act and thus, the respondent company is therefore, exempt from the application of provisions, including the penal provisions, in view of section 18 of 1867 act. Equally so, before I conclude, I must express that 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. Resul ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
