The Rajasthan High Court rejected a PIL against Indian fantasy sports giant Dream11 that alleged it offered gambling services and avoided proper tax.
The Rajasthan High Court dismissed a Public Interest Litigation seeking the ban of Dream11, alleging that online fantasy sports are games of chance, thereby constituting the illegal act of gambling and betting.
The bench of Chief Justice Indrajit Mahanty and Justice Mahendar Kumar Goyal, citing the ruling of Bombay High Court and Punjab and Haryana High Court in similar cases, ruled in favour of Dream11.
"The result of fantasy game depends on skill of participant and not sheer chance, and winning or losing of the virtual team created by the participant is also independent of the outcome of the game or event in the real world; we hold that the format of online fantasy game is a game of mere skill and it has protection under Article 19 (1) (g) of the Constitution," the court observed.
This article guarantees freedom to practise any profession, or to carry on any occupation, trade or business.
The Supreme Court has also previously upheld the legality of Dream11 deeming it as a game of skill which requires the use of substantial knowledge, strategy, skill, and adroitness against other participants
The petitioner also alleged that Dream11 was avoiding taxes by paying GST under improper classification.
According to the petitioner, the fantasy sports firm should pay 28 per cent GST on the entire amount collected for a contest instead of the current 18 per cent only paid on the commission Dream11 charges.
The bench referred to the judgement passed by Bombay High Court in a similar case and ruled in Dream11’s favour citing that it is not liable to pay 28 per cent as applicable to ‘online gambling services.’
However, the court deemed it appropriate to leave the issue for the GST authorities to consider in accordance with the law.