Important Restrictions on Fantasy Sports Betting Business in India You Need to Know

In recent years, fantasy sports have exploded in popularity. A growing number of people from all over the world play fantasy sports. In India, the number of fantasy sports participants grew from 2 million in 2016 to over 90 million in 2019. And that figure continues to increase at a rapid pace. The Indian online fantasy sports segment was valued at over INR20 billion in the 2021 financial year, and it is expected to exceed INR50 billion.

But what exactly are fantasy sports? In a nutshell, these are online games where you create a virtual team of real players. You collect points based on real-life statistics, manage your team, add or sell players. The most popular types of fantasy sports include football, basketball, baseball, hockey, cricket, and others.

Indians have always had a passion for different sports, with the most popular being cricket, rugby, and football. Next to that, the upward trend in mobile phone usage further stimulated the growth of India’s fantasy sports market. Due to the Covid-19 pandemic, millions of people had to stay indoors. That is another factor that fuelled the industry’s exponential growth.

Are Fantasy Sports Legal in India?

Fantasy sports gaming continues to be a burgeoning segment in India. Unfortunately, India’s laws pertaining to sports betting and gambling activities are ambiguous and archaic. The Public Gambling Act of 1867 is the primary legislation that governs gambling and sports betting. Some operators exploit the loopholes in the Indian regulatory framework and accept players from India.

The legality of fantasy sports in India is a moot point because the Public Gambling Act differentiates between games of luck and skill-based games. The law provides an exemption to the games that include an element of skill, but it does not define the term “game of skill”.

The Supreme Court of India stated that games of skills are all those games that predominantly depend on the player’s knowledge and experience. Thus, the Supreme Court classed fantasy sports in the skill-based category of games. The Bombay High Court upheld this decision, stating that players pick a team based on their knowledge instead of betting on the outcome of a game.

But under the Constitution of India, each state has the right to legalize gambling and sports betting at its discretion. This further adds to the complexity of India’s fantasy sports regulatory framework. In most states, fantasy sports are not regulated. Only the states of Nagaland and Meghalaya have licensing regimes for operators of fantasy sports platforms. In Andhra Pradesh, Telangana, Assam, and Odisha, people are forbidden to bet on fantasy sports.

Why Some Big Sports Betting Platforms Prefer Not to Enter the Indian Market?

Some major fantasy sports platforms shy away from the Indian market because of the legal hurdles they may face. The biggest problem is the lack of a central regulatory framework. Furthermore, India has no governmental authority that regulates the industry. Another problem is that the element of skill varies between the different fantasy sports games.

A major challenge for the fantasy sports betting platforms is that India’s regulatory regime is shaky. According to this report, a good example of this is Karnataka’s ban on all forms of gambling that came into effect on 5th October 2021. As a result, one of the biggest fantasy sports platforms in India, Dream 11, had to suspend operations in Karnataka as the company faced action for violating the new gambling law.

The Future of Fantasy Sports in India

In December 2020, the policy think tank of the Government of India, NITI Aayog, presented some guiding principles for the country’s regulation of online sports betting. The draft suggests that a uniform regulatory framework should be adopted. Furthermore, a government-recognized authority should be established to regulate and oversee the industry. This is the best-case scenario, but establishing such a self-regulatory architecture might not be an easy task due to the state’s different laws regarding fantasy sports.

It goes without saying that India has to overhaul its gambling laws. By regulating gambling and sports betting, the country would curb illegal activities and boost the economy. Besides, such a move would provide fantasy sports fans with a safe environment to play. Some states have already taken steps in the right direction.

For example, the Madras High Court nullified a law that put a blanket ban on all forms of online gambling, including games of skills. Telangana expressed its willingness to regulate fantasy sports and become an example for other states. However, India still has a long way to go before legalizing fantasy sports.