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Comprehending the Legal Framework of Fantasy Sports in India

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In any given year, the online fantasy game sector in India grows at a rapid pace, going from being unknown to obtaining widespread recognition.

During the COVID-19 pandemic, the global technology setup underwent major shifts. Modes of entertainment have spread their wings into the virtual world, gaining access to unexplored regions.

Gaming constitutes one of the most fascinating pastimes, drawing curiosity, eagerness, and passion. The global phenomenon of gaming continues to draw people of every age and background due to its simple availability and massive network.

While other businesses are being severely impacted by the pandemic, the online fantasy game industry and the best cricket betting sites are among the few that continue to gain impressive growth.

With the prospect of quick cash bringing players forward, however, there is currently debate about their legality and designation as games of chance or skill.

Legal Framework for Gambling

The Public Gambling Act of 1867 governs public gambling and gaming institution activities in India. Because gambling is overseen by legislative bodies, there is a mishmash of legislation across the country since each state has developed regulations of its own.

Even though the majority of regions contain provisions that prohibit gambling and betting, certain states, like Goa, Sikkim, and Daman, have legalized multiple kinds of gambling.

The Expansion of Fantasy Gaming 

With patronage of more than 90 million individuals in the year 2019, the Fantasy Gaming sector is not merely among India’s top fastest-growing sectors but also an unparalleled avenue for investment for overseas organizations that can greatly benefit from the Indian Fantasy Gaming sector’s rapid expansion and massive audiences.

Over time, the field of fantasy sports has been able to draw significant sums of Foreign Direct Investment in India. The industry garnered over INR 1,500 crores in FDI in the years 2018 and 2019, with a sharp increase annually.

According to the National Institute of Technology Ayog’s report, the Fantasy Gaming Industry has an opportunity to draw foreign direct investment (FDI) worth more than INR 10,000 crores across the coming decades, with 1.5 billion transactions on the internet generated by the year 2023.

Fantasy Sports: Skill vs. Chance

One of the most significant legal challenges that fantasy game developers in India confront involves creating a platform that is based on “skill” rather than “chance.” While various nations define “chance and skill” in numerous ways.

India has adopted the “dominant factor” assessment, which pits variables such as skill and chance against one another to determine which dominates the other.

Therefore, the route to success for any Fantasy Gaming firm comes from the attainment of “skill,” which must be obtained through meticulous preparation and platform structure, supported by a strong regulatory viewpoint.

Goods and Services Tax Exemption 

The courts also tackled the Goods and Services Tax (GST) liability of fantasy sports sites. The query of the extent to which the GST applied to the data entry fees received was disputed in a Public Interest Litigation, or PIL, filed with the High Court of Bombay.

The court concluded that the funds maintained by the site as a commission constituted an “actionable claim” and were thus excluded from GST under Schedule III of the CGST Act, 2017.

The Verdict 

In India, fantasy sports games do not qualify as betting or gambling but instead as skill-based pursuits. Players can enjoy these types of games with the knowledge that they are considered legal based on legal rulings and governing authorities.

Fantasy sports games, such as those offered by the best cricket betting sites, have been recognized as legal in India by an array of high courts, notably the courts of Bombay, Punjab, and Rajasthan.

The courts have recognized the significance of skill in these activities, along with the superiority of skill over chance. Services for fantasy sports are legitimate firms that are covered by the Constitution’s Article 19(1)(g). Furthermore, they take advantage of GST exemptions for income earned as admission fees.