PIL filed in Delhi HC to ban online fantasy sports and betting platforms

Fantasy sports are on a rise, and there’s no denying that. Millennials, Gen Z, Gen X, and the people who’re using internet thanks to the Jio revolution, everyone is eyeing that quick money to survive or thrive in their very own ways.

Isn’t that why internet saw the opportunity to bring that underworld to a virtual market over a chance based server masquerading as skills.

Nagaland Prohibition of Gambling and Promotion and Regulation of Online Skills Act, 2016, helped apps like Dafabet, Betway, Royal Panda, 1xBet, BetReally India which allow even offshore betting to engage the general public in betting under the garb of working on skill basis. For fantasy gamblers, there’s Adda52, Khelo365, or PokerStars among others that apparently are won by “math and skills”, not chance.

A CA and a social activist Avinash Mehrotra has filed a Public Interest Litigation (PIL) in the court regarding these apps that are actually cultivating the addictive and dangerous “art” of gambling among several sections of the society. Not like the Nagaland Act makes it legal all over the country, a point he raises.

The reason that these apps should be illegal and hence should be banned are three, as he postulates.

One, it’s not just that people spend their earnings into a chance of making big money with no effort, this money goes both in India, and abroad. Large sized and number of bets are placed via foreign currency, leading to exodus of foreign exchange leaving India and hence violating Foreign Exchange Management Act.

Two, there is a grey area when it comes to tax operations of these companies where sometimes there is no deduction at source and most other times the winners don’t pay tax either bringing the issue under the purview of Income Tax Act. Recently, it was reported that gaming startups are likely to face a huge change in  tax liabilities, and this seems to be another step in that direction.

Three, again the issue of the requirement to identify the fine line of difference between skill and chance. He says, “card games like teenpatti and blackjack are purely based on chance - the show of cards - and not skill.” Similarly, fantasy sports is also pure play betting where there is no betting skill, just the player - subject of bet’s performance.

At most, the card game part is still a shadowy subject with the lot of scope of math and people playing abilities to help win games. Fantasy sports betting is closer to traditional gambling, only made easier via internet.

Mehrotra, then approached to Delhi High Court to direct Union Ministry of Information Technology and RBI to help “put an end” to these activities that are liable to affect user’s behavioural and psychological health, as GLaws puts it.

The PIL asks the court to direct Union Ministry of Information Technology in using Section 67 and 69 of Information Technology Act, 2000 to put a halt on these gaming startups’ operations. RBI has been roped in due to Foreign Exchange concerns.

The matter is to be heard by a division bench of Delhi HC that includes Justice Anup Bhambhani and Chief Justice Rajendra Menon on 29th of this month (May 2019).