The return of the Indian Premier League has been a welcome change on our television screens. The products advertised in the IPL are often the flavor of the day and with this it’s impossible to ignore the popularity of fantasy gaming applications in this year’s IPL.
We all might have seen extensive advertisement campaigns led by international cricketers for different fantasy gaming applications. Although these applications may be in vogue they do present with them, a set of legal challenges.
Through the course of this article, I would like to highlight pertinent hurdles that fantasy gaming applications may face in India. These legal obstacles are unique as they are not only limited to the courts of law and may often stretch to boardroom negotiations.
Moreover when they are in the realm of the courts, they include issues which have invited conflicting viewpoints from different courts. In such a scenario, the Supreme Court is presented with a unique opportunity to shape the future of the fantasy gaming industry whose projected worldwide market size is estimated to reach around 50 billion dollars by 2027.
Before addressing the legal challenges, we must step back to understand what we mean by fantasy gaming applications.
In fantasy sports, a participating user acts as a manager and builds a team constituting real players. This team competes against teams built by other participating users. The criteria to determine the winner is on the basis of the scores and achievements of the real individual sportspersons in certain professional sporting events.
The first challenge posed to fantasy gaming applications comes in the form of a rapidly growing field of law, Intellectual Property Rights. Fantasy gaming applications make use of images of various sportsmen on their applications. In India, copyright can be availed on original images and the players itself enjoy a right of publicity for their own images.
This right of publicity enjoyed by the players has evolved from the right to privacy and grants to every person the right to enjoy a commercial benefit from the use of his or her identity and to prevent unauthorized use of the same. Owing to this right, the use of a player’s image without his or her approval may bring rise to a cause of action against the fantasy gaming application.
Other licensing hurdles which fantasy gaming applications may need to overcome are those related to using the names and logos of different sporting teams which have been trademarked and the usage of statistical information pertaining to results of sporting events.
Although with regard to these issues, the Courts have ruled in favor of the logos and statistical information being liberally used, a scenario may arise where the fantasy applications will a sign a license agreement between the sporting events and themselves, in which a substantial license fee may need to be shelled out.
This might also leave the fantasy gaming operators at the whims and fancies of the management of professional sporting events. An instance of the same was when the National Football League in 2006 raised their license fees by $1,975,000 dollars, merely in the period of a year.
The next and most important challenge posed to fantasy gaming applications comes from an often repeated question, whether these applications are a game of skill or a game of chance. If they are termed to be a game of chance by the court, these applications would fall within the scope of the Gambling Act and hence be illegal. However if they are termed to be a game of skill, then the provisions of the Gambling Act shall not apply to these applications.
Fortunately the fantasy gaming industry can take solace in the judgements passed by the Punjab and Haryana High Court as well as the Bombay High Court which ruled fantasy gaming applications to be a game of skill.
The rationale behind verdicts of the different High Court’s included similar facts such as users of these games must study the rules of the sport, they must analyze the playing conditions and possess knowledge about the sport to succeed in such fantasy gaming applications.
Matters however came to a head when the Supreme Court in March this year stayed the operation of these verdicts which had earlier held fantasy gaming applications to be a game of skill. The final hearing on this matter is yet to take place and if one observes how the Supreme Court in the past has dealt with similar matters, one cannot help but notice the conflicting conclusions it has reached.
At one end the Apex Court held horse racing and the card game of rummy to be a game of skill. On the other hand it held poker and blackjack, played on video games and machines to be a game of chance. With this the ball is now in the court of the judges of the Supreme Court to finally adjudicate upon this matter.
The verdict of the Supreme Court in this matter will have substantial financial implications for fantasy gaming applications if they are held to be a game of chance. These financial implications may include an increase not only on the rate of GST paid to the government but also on the amount on which GST is paid.
The most long lasting impact of how all the legal challenges will play out for fantasy gaming applications will be felt by the 90 million fantasy gamers in India, as in a cricket crazy nation such as ours, these applications have caught the eye of the consumers.
Janay Jain is a Law Student at Government Law College, Mumbai. The views expressed are personal.