Bombay HC dismisses PIL against Dream11 over gambling and tax evasion

The fantasy sports platform Dream11 ad slogan 'Khelo Dimag Se' does not only serve as an advertisement purpose but it seems to have a bearing element for what the company is all about.

And this was reflected in recent Bombay High Court ruling related to the app.

The court dismissed a PIL against fantasy sports gaming platform that alleged it for gambling as well as evading tax. The court clearly said that Dream11 is a game of skill and not a game of chance so calling it a gambling platform has no merit at all.

Advocate Sujay Kantawala who was representing the petitioner had claimed that the promoters of the game were encouraging gambling and were not paying taxes. However, the Division Bench of Justices Ranjit More and Bharati Dangre had totally refuted the allegations.

“It can be seen that success in Dream 11’s fantasy sports depends upon user’s exercise of skill based on superior knowledge, judgement and attention, and the result thereof is not dependent on the winning or losing of a particular team in the real world game on any particular day. It is undoubtedly a game of skill and not a game of chance," outlined the court order.

For the allegation of GST evasion, it further clarified that there is a scope of tax fraud only if Dream11  allows gambling or betting, which is not the case.

The court order also reprimanded the petitioner for attempting to reopen the already settled case by Punjab & Haryana High Court in 2017.

The matter of tax evasion was highlighted in April when the Tax Department in India had started to scrutinise the tax paid by gaming startups like Dream11, Fantasy Sports.

As of now, taxes are charged on the commission that gaming platforms get from their users' contribution. But now, the tax authorities are questioning whether the tax should be implied on entire contest entry amount instead of charging the tax on commission.

If implemented, it will have a huge effect on these fantasy gaming platforms.

Of late, a social activist Avinash Mehrotra had filed a PIL in the Delhi court alleging that these fantasy gaming apps are actually cultivating the addictive and dangerous “art” of gambling among several sections of the society.