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Below are the key points from an Indian High Court’s judgement particularly regarding the fantasy games played. A challenge to this judgement was dismissed by the Supreme Court of India as well:
On this basis, the Court adjudged that playing fantasy games constitutes a ‘game of mere skill’, which makes the online fantasy games excused from the provisions of the Public Gambling Act, 1867 (PGA).
To understand the concept of Games of mere Skill, we need to examine the pre-independence gambling legislation enacted in India. The first legislation on gambling was the Public Gambling Act, 1867 (“PGA”) which was enacted “to provide for the punishment of public gambling and the keeping of common gaming-houses”. The PGA if it shall not apply to games of ‘mere skill’. Thereafter, most states in India have enacted adaptations of this central act with or without modifications* and continued to perpetuate this line of thinking.
However, there are certain exceptions to above rule, as witnessed by Assam Game and Betting Act, 1970, Orissa (Prevention Of) Gambling Act, 1955, and the recently promulgated Telangana State Gaming (Amendment) Ordinance, 2017. These states have enacted these regulations to curb the menace of gambling. These legislations tend to either make any activity involving an element of chance illegal or increase the threshold of dependence on skill in determining whether a game is a game of skill or game of chance. In the states of Assam and Orissa however, games of chance are expressly prohibited, and the law does not provide an exception for games of mere skill. Therefore, games of mixed chance and skill, regardless of their relative proportions cannot be played for cash in these states.
In Nagaland, the state government has recently enacted the Nagaland Prohibition of Gambling and Promotion and Regularisation of Online Games of Skill Act, 2016, which requires licensing and regulation of online games of skill offered or accessible in Nagaland. This law requires the licensing of any of skill, which is accessible in Nagaland and provides certain protections and exemptions to licensed entities.
The Supreme Court of India has interpreted the words “mere skill” to include games which are preponderantly of skill and has laid down that (i) the competitions where success depends on substantial degree of skill will not fall into category of `gambling’; and (ii) despite there being an element of chance, if a game is preponderantly a game of skill, it would nevertheless be a game of “mere skill”**.
Thus, a game of chance differs from a game of skill, in that, while games of chance are wholly and solely based on a contingent event without any substantial application of mind or effort, games of skill are said to be those games that involve a substantial amount of human skill and application of mind.
*These legislations have been enacted in pursuance of State Government’s power under Entry 34 and Entry 62 of List II in the Seventh Schedule of the Indian Constitution. While Entry 34 of List II of the Constitution of India specifies that betting and gambling as a state subject which empowers each state’s legislature with competence to legislate on such matters, and Entry 62 confers power on the states to legislate and impose taxes, inter alia, on betting and gambling.
**State of Bombay v. R.M.D. Chamarbaugwala, AIR 1957 SC 699
***Varun Gumber v. Union Territory of Chandigarh and Ors, CWP No. 7559 of 2017.