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Online Games Involving Money

Earning money through online games or different kinds of apps are one of the most famous ways used by people all over the world, especially in India. But is it legal in India ? The Public Gambling Act, 1867 prohibits gambling. In India, there are 2 terms when we talk about online games : Game of Chance and Game of Skill.

Game of Chance involves sheer luck and also an element of skill though the skill element cannot influence the game much and it is prohibited under the Public Gaming Act.

Game of Skill can only be played by people who have proper knowledge and a good amount of expertise. Since it involves using one's brain in playing the game, it is legal.

Speaking of India, Game of Chance involving money or stake is illegal but Game of Skill involving money or stake is legal. In this matter of online games, States were given the discretion whether to give it the status of legal or illegal . Different states regulate different rules. Assam, Orissa and Telangana have prohibited all kinds of gambling and betting including games of skill. Sikkim and Nagaland have set up and follow special laws.

Sikkim Online Gaming (Regulation) Act 2008 which controls and imposes regulations on online gaming through electronic or non-electronic ways and levies taxes on people who play in the state of Sikkim. Recently in 2018, this act got amended bringing a new provision of compulsorily having a photo identity card issued from outside the state of Sikkim to play online games and which also prevents the people of Sikkim from playing games.

Nagaland Prohibition of Gambling and Promotion and Regulation of Online Games of Skill Act 2015 & Nagaland Prohibition of Gaming and Promotion and Regulation of Online Games of Skill Rules 2016 regulate and keep a check on games requiring skills.

In the current scenario there are many online gaming apps which involve stake among which Dream11 is very popular and controversial.

Dream11 is an online fantasy sports app where you have to select a team for an upcoming match and compete with other players. This involves financial risk and should be played responsibly. In this we are supposed to select a team with the number of players required (according to the sport) within 100 credits. Then we have to select an upcoming match and follow it. We have to enter into a contest with the required amount. Then we are awarded with fantasy points according to the live performance of the players of our team.

The problem faced by India was whether online fantasy sports was a game of chance or a game of skill. India resolved this issue with the help of the Dominant Factor Test.

Dominant Factor Test is a test that determines legally what is and is not gambling. Character of the game determines whether one game is of chance or skill. This test is not to check whether the game contains an element of chance or skill, but to check which factor is the dominating one in deciding the outcome.

A Public Interest Litigation (PIL) was filed against Dream11 in the Rajasthan High Court seeking a ban on it which was dismissed by the HC referring to the judgement given by the Punjab and Haryana High Court which said that the success in Dream11 arises out of users exercise, superior knowledge, judgement and attention. The court also said that the element of skill and predominant influence on the outcome of the Dream11 is there and it is a game of mere skill and not gambling.

A Special Leave Petition (SLP) was filed against the Rajasthan High Court in the Supreme Court for dismissing the PIL but the SC upheld the HC by dismissing the SLP which again justified that Dream11 is legal.

In a recent case between Gurdeep Singh Sachar (petitioner) and Dream 11 Fantasy Private Limited(respondent). The petitioner contended that the respondent conducted illegal operations of gambling in the name of online gaming. The respondent countered that playing Dream 11 required a minimum amount of skill and not chance, with the help of players who had already played on Dream 11. In the judgement , Bombay High Court held that online fantasy sports gaming is legal. Thus in India, game of skill is legal in India and game of chance involving money is illegal , although different states follow different norms.

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