FIFS: Karnataka amendment leads to confusion and lack of clarity

The Karnataka government’s notification banning all skill games for stakes has left the industry confused as the ban comes in the middle of a long cricketing season. Major fantasy platforms like Dream11, MPL, PaytmFirst are associated with the cricketing body BCCI in some form of partnership. Dream11 was the main sponsor of the IPL 2020 edition when Vivo withdrew for a year. 

The law is notified days after the state home minister informing the media that the law will be implemented in about two months. Federation of Indian Fantasy Sports (FIFS), the industry body for fantasy sports platforms has circulated a note to the members advising abundant caution by the platforms in the state of Karnataka. 

The Amendment Act widens the scope and definition of act of ‘wagering or betting’ to state that any risking of money or otherwise on the unknown result of an event including on a game of skill shall be prohibited. However, the definition of ‘gaming’ continues to refer to wagering or betting on ‘games of chance’,” read the note. G2G had obtained a copy of the note. 

Real money gaming platforms like Mobile Premier League,  Ballebaazi, Paytm First Games, Nazara’s HalaPlay, and RummyCircle have suspended their services for users in Karnataka after state legislation prohibiting money wagering and betting was notified on Tuesday. However, industry leader Dream11 refrained from commenting on the law and continued to operate in Karnataka. So far, the Karnataka law enforcement department had not commented on Dream11 continuing operations, despite the ban coming into force. 

FIFS, founded and controlled by Dream11, in the internal note stated that the amendment leads to confusion and a lack of clarity on the permissibility of games of skill for stakes. “The Amendment Act has omitted the exemption granted to ‘wagering by persons taking part in such game of skill’ and states that the exemption shall only be granted to a ‘pure game of skill’. The Supreme Court, in M.J. Shivani v. State of Karnataka (1995(3) SCR 329), has recognised that no game is a game of skill alone and employed the preponderance of skill standard to differentiate between games of chance and games of skill,” read the note. 

We have reached out to FIFS and Dream11 for comment and will update the story when they respond. Before Karnataka, neighbouring states like Andhra Pradesh and Telangana along with Assam, Odisha, Nagaland, Sikkim, Meghalaya had enacted laws concerning online gaming. Similar attempts by Tamil Nadu and Kerala were struck down by the Madras High Court and Kerala High Court respectively.

The industry is optimistic that more clarity will emerge once the law goes under legal scrutiny. “In the last two months, there have been more positives than negatives (in the sector). I’m seeing that state governments are losing battles in their respective high courts and judgements are becoming sharper and clearer where there are black and white rather than grey,” Manish Agarwal, the chief executive of India’s first publicly listed gaming company Nazara Technologies was quoted on MoneyControl