Betting is illegal in India but Dream11 isn’t, here’s why

Introduction:

We all know that betting is an illegal activity in India. Dream11, a fantasy sports platform based in India that allows users to play fantasy cricket, hockey, football, kabaddi and basketball. We always feel like in substance, there’s no difference between contests entered in Dream11 and betting due to following things:

1. Pooling of Money from various persons

2. Calculation of rewards based on amounts received / proposed to be received and is based on performance of some other player/s

3.Reward is based on happening and non-happening of an event (but is actually not, which is elaborated below)

For above reasons, we believe that Dream11 is a kind of betting activity but the same isn’t true, here’s why.

Difference between Betting and Dream11:

Betting involves putting money and getting rewarded purely based on happening / non-happening of an event which hardly requires any skill. On the other side, Dream11 (which is a fantasy game) is a game of skill and involves selection of a distinct team players at the choice of the participant.

* Selection of a player into team will require analysis and judgement with respect to his past performance, pitch conditions and weather conditions and ability to perform against opponent team etc.

* Number of players in a team will consist of number of players as playing in real-life sports team (Like 11 for Cricket / Football, 7 in Kabaddi etc)

* There’s a limit as to maximum and minimum number of players from a team (for example, in a cricket contest, a participant can have maximum 7 players from a particular team and a team should have atleast one wicket keeper etc) which distinguishes it from betting

* Duration of all contests are atleast one full sports match (unlike in betting, where it can be done even for a ball / over / player etc)

* No team changes are allowed by participants after start of the match and deadline for updating / participating in a contest which is usually before start of match

* Credits for including a player in team are same for every one (not differentiated to the advantage / disadvantage of any participant) and no change in credits allotted to any participant (100 credits per team to be created)

* Competition among participants in a contest can be tracked on a real time basis and every player is allowed to view / download details of all teams in a contest which provides utmost transparency

Legal Compliance of Dream11:

• On the basis of distinguishing features mentioned in ‘Difference between Betting and Dream11’, Dream11 is considered as a game of skill and therefore exempt from provisions of Public Gambling Act, 1867 and hence a legitimate (legal) activity as per Constitution of India
• Dream11 is a founding member of FIFS (Federation of Indian Fantasy Sports)
• On winnings above Rs 10,000, TDS at the rate of 30% is being deducted under 194-B of Income Tax Act, 1961
• GST at the rate of 18% is being paid by Dream11 on supplies made by it (considering them as other online services)

Conclusion:

After analysis of above mentioned facts and compliances, it may be concluded that Dream11 is a fantasy game and not illegal as incase of betting / gambling. The same has been ordered by High Courts of various states.

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