Tag: skill

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Legal & Regulatory

SC Issues Notice, Stays Bombay HC Order in Dream11 Betting & GST Evasion Case

Dream11 legality to be decided by SC 3-judge bench

A three-judge bench of the Supreme Court, comprising of Chief Justice SA Bobde and Justices BR Gavai and Surya Kant issued notice to Dream11, Union of India and social activist Gurdeep Singh Sachar in an appeal filed by the state of Maharashtra as per a report in ETPrime today.

While hearing the Special Leave Petition (SLP) filed by the Maharashtra government on 6th March, 2020, the 3-judge bench of the apex court noted that the High Court decision ruling Dream11 to be a game of skill and dismissing claims of GST evasion against it was given without hearing the central or state government or issuing notice to any of the parties to the matter.

Justice Gavai, on behalf of the bench, expressed displeasure at the haste and manner in which the judgment of the Bombay High Court was given, within a span of less than three working days, without hearing any of the other parties.

The bench also dismissed the argument of Senior Counsel and former Attorney General of India, Mukul Rohatgi, who stated that a lawyer had appeared on behalf of the state government on 30th April, 2019 in the Bombay High Court.

The 3-judge bench of the apex court will likely hear the matter in April 2020 and delve into the merits of twin issues of whether Dream11 is a game of skill or amounts to gambling/betting and whether the fantasy sports website has been paying GST in a correct manner or indulging in evasion by not paying tax at the rate of 28% on entry fees.

It may be noted that Mumbai-based lawyer and social activist Gurdeep Singh Sachar had filed a Public Interest Litigation in April, 2019 asking for a ban on Dream11 and probe against it for GST evasion.

On 30th April, 2019, a division bench of the court comprising of Justices Ranjit More and Bharati Dangre ruled that Dream11 and fantasy sports games involved use of skill and judgment and was consequently outside the ambit of anti-gambling legislation. It also stated that Dream11 correctly paid GST on the platform fee retained by it as against the entry fee of every contest that was claimed by the petitioner.

A Supreme Court division bench headed by Justice Rohinton Nariman had earlier dismissed all appeals and a clarification application against the Bombay High Court order filed by Advocate Varun Gumber, Sachar as well as the Union of India, while allowing the central government to file a limited review petition in the Bombay High Court on the issue of allegations of GST evasion against Dream11.

The 3-judge bench of the Supreme Court has however, while hearing the Maharashtra government’s plea, implicitly set aside the orders of the Justice Nariman-led division bench and is likely to give a decisive verdict on the legality of daily fantasy sports and online gaming in the country.

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Legal & Regulatory

Haryana Consumer Court Imposes Rs. 2 Lakhs Damages on Dream11, Holds it Guilty of Malpractice

Haryana Consumer Forum penalises Dream11

The District Consumer Disputes Redressal Forum of Kaithal, Haryana held online fantasy sports website Dream11 liable for malpractice and imposed damages of Rs. 2 lakhs on it for non-fulfillment of its commitment of giving free contest tickets to the winner of the consumer.

The Kaithal Consumer forum passed the order on 25th February, 2020 while disposing a consumer complaint filed by one Balinder Rapria, resident of Balu village in Kaithal, who won a fantasy league contest of the Carribean Premier League T20 on Dream11.com in 2018.

The contest entailed Rapria and one of his family member/friend to an all expense paid trip to watch the ICC Women’s World T20 final in Antigua and Barbuda in November, 2018.

However, it was alleged by the complainant Rapria that Dream11 failed to comply with the terms and conditions of the contest and did not provide the free all expenses trip as promised.

Dream11 however challenged the averment and stated that it was ready and willing to provide the all expenses trip, but the visa had to be procured by the complainant, although the company was ready to provide assistance with respect to the same and that there were calls and discussions with the complainant regarding the same.

It also stated that it had offered an all expenses trip to the complainant at an alternate venue in Australia in lieu of the trip to Antigua.

The Consumer Forum however, after going through email records noted that there was no email record or correspondence by Dream11 stating that the complainant was bound to obtain the visa on his own and in fact, the fantasy sports company apologised in emails to the complainant regarding its guilt and offered a trip to an upcoming match in another country.

Ruling that the failure to fulfill the trip amounted to deficiency of service and malpractice under Section 2 of the Consumer Protection Act, 1986, the 3-member bench of the district consumer forum directed Dream11 to pay Rs. 2 lakhs to the complainant as damages along with 9% interest from the day of filing of complaint and Rs. 5,000/- as litigation costs.

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Legal & Regulatory

Rajasthan HC Reiterates that Dream11 is a Game of Skill

Rajasthan HC clean chit to Dream11

A division bench of the Rajasthan High Court in an order given last week, reiterated the earlier pronouncements of the Punjab & Haryana and Bombay High Courts that ruled fantasy sports to be games of skill and consequently falling outside the ambit of gambling/betting legislations.

The division bench comprising of Chief Justice Indrajit Mohanty and Justice Ashok Kumar Gaur after hearing arguments over several hearings and giving opportunity to the respondents to file replies and the petitioner to file a rejoinder, pronounced the order on 14th February, 2020 in the Public Interest Litigation (PIL) filed by one Chandresh Sankla, a resident of Ajmer.

The petitioner in his PIL claimed that online fantasy sports website Dream11 was involved in betting activities and gambling activities and asked that the state government stop such activities, initiate criminal proceedings against the company and ensure that the crimes committed by Dream11 are not carried out anywhere across India.

Sankla in his petition impleaded the Home Secretary, Government of Rajasthan, State of Rajasthan as well as Dream11 founders Harsh Jain and Bhavit Sheth as respondents.

Justice Gaur, while speaking for the court in Chandresh Sankla v. State of Rajasthan & Others reproduced the relevant portion of the 2017 order of the Punjab & Haryana High Court Varun Gumber v. Union Territory of Chandigarh & Others wherein it was decided: “The respondent company’s website and success in Dream 11’s fantasy sports basically arises out of users exercise, superior knowledge, judgment and attention…. Equally so, before I conclude, I must express that gambling is not a trade and thus, is not protected by Article 19(1)(g) of Constitution of India and thus, the fantasy games of the respondent-company cannot said to be falling within the gambling activities as the same involves the substantial skills which is nothing but is a business activity” 

The Court also extracted the relevant portion of the Bombay High Court’s judgment in Gurdeep Singh Sachar v. Union of India & Others which reiterated the conclusion of fantasy sports involving substantial degree of skill: “Only if the result of the game/contest is determined merely by chance or accident, any money put on stake with consciousness of risk and hope to gain, would be ‘gambling’ or ‘betting’. There is no merit in the submission that the result of their fantasy game/contest shall be considered as merely by chance or accident notwithstanding involvement of substantial skill.”

The Rajasthan High Court in its judgment also noted that both Gumber’s and Sachar’s Special Leave Petitions (SLPs) in the Supreme Court where dismissed.

It further noted that the Supreme Court while recently dismissing Sachar’s SLP as well as subsequent clarification application had noted that the issue of whether gambling is or is not involved in the Dream11 matter cannot be revisited by the Bombay High Court while hearing the review petition filed by the union government and that only the GST issue can be re-heard by the Bombay High Court.

The court ultimately while ultimately dismissing the petition concluded that ‘the issue of treating the game “Dream 11” as having any element of betting/gambling is no more res integra in view of the pronouncements by the Punjab and Haryana High Court and Bombay High Court and further the SLPs have also been dismissed against the orders of these High Courts.’

Categories
Legal & Regulatory

Legal Heavyweights Battle it out in Dream11 GST Evasion case

Dream11 legality to be decided by SC 3-judge bench

The Bombay High Court has adjourned the hearing in a review petition filed by the central government on the manner of payment of Goods and Services Tax (GST) by Dream11 to 19th March, 2020.

A division bench of the Bombay High Court comprising of Justices Ranjit More and Bharati Dangre was earlier supposed to hear the review petition filed by the Union of India in the Public Interest Litigation (PIL) filed by advocate and social activist Gurdeep Singh Sachar in-chamber on 11th February, but on the hearing date decided to adjourn the matter by more than a month.

According to the order of the court, senior advocate and former Attorney General of India Mukul Rohatgi (who has also represented the fantasy company in several earlier hearings in the Supreme Court on related matters) along with senior counsel Vikram Nankani appeared for Dream11, while Additional Solicitor General of India Anil C. Singh appeared for the central government and counsels Yogesh Naidu and Sarosh Damania appeared for Sachar.

It may be noted that Sachar had originally filed a PIL in the Bombay High Court in April 2019 alleging that online fantasy sports operator Dream11 conducts gambling operations and wrongly pays Goods and Services Tax (GST) only at the rate of 18% on the margin retained by the company, instead of 28% on the face value of bets under Rule 31A of the Central GST Rules.

A division bench of the Bombay High Court comprising of Justices Ranjit More and Bharati Dangre had dismissed Sachar’s petition and ruled in Dream11’s favour on 30th April, 2019.

Sachar as well as the Union of India, State of Maharashtra and activists Varun Gumber and Avinash Mehtrotra had filed appeals/applications against the order of the Bombay High Court in the Supreme Court.

However, through separate orders, the Supreme Court dismissed Gumber’s petition as well as the central government, Sachar and Mehrotra’s pleas, but allowed the government to file a limited review on the GST issue in the Bombay High Court.

On 31st January, 2020 a Supreme Court bench comprising Justices Rohinton F. Nariman and S. Ravindra Bhat also dismissed a clarification application filed by Sachar and noted that the issue of whether gambling is or is not involved in Dream11 cannot be revisited by the Bombay High Court.

Notwithstanding the Supreme Court order restricting arguments on the gambling/betting issue, the central government in its review petition contended that gambling/betting is involved in Dream11 and has claimed revenue implications of over Rs. 2100 crores in the matter.

The government in its petition has also relied on judgments of the Kerala, Madras and Gujarat High Courts ruling rummy and poker when played for stakes to be gambling.

The central government has also claimed that there is collusive behaviour between the PIL petitioner Sachar and Dream11 as well as violation of principles of natural justice since the original order was passed by the High Court without hearing it.

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Legal & Regulatory

SC Dismisses Gurdeep Sachar’s Clarification Application in Dream11 GST matter

SC brings finality on legality of fantasy sports in India

A Supreme Court bench of Justices Rohinton F. Nariman and S. Ravindra Bhat on Friday dismissed a clarification application filed by advocate Gurdeep Singh Sachar, which had urged the apex court to allow the issue of whether the fantasy games offered by Dream11 amounts to gambling/betting can be reviewed in the Bombay High Court for the purposes of determining whether there is any GST evasion on Dream11’s part.

Sachar’s counsel, senior advocate Mahabir Singh, contended that the application for clarification be allowed as the issue of gambling/betting is connected to determination of the manner of payment of GST, while former Attorney General of India and Senior Counsel Mukul Rohatgi, appearing for Dream11 strongly opposed the application.

Senior Advocate K. Radhakrishnan appeared on behalf of the central government.

The Supreme Court bench while dismissing Sachar’s interlocutory application, noted, ‘It is reiterated that in accordance with our order dated 13.12.2019, the only scope of the review filed in the Bombay High Court is with respect to GST and not to revisit the issue as to whether gambling is or is not involved.’

Sachar had originally filed a PIL in the Bombay High Court in April 2019 alleging that Dream11 conducts gambling operations and wrongly pays Goods and Services Tax (GST) only at the rate of 18% on the margin retained by the company, instead of 28% on the face value of bets under Rule 31A of the Central Goods and Service Tax Rules, 2017.

A division bench of the Bombay High Court comprising of Justices Ranjit More and Bharati Dangre had dismissed Sachar’s petition and ruled in Dream11’s favour on 30th April, 2019.

Sachar as well as the Union of India, State of Maharashtra and activists Varun Gumber and Avinash Mehtrotra had filed appeals/applications against the order of the Bombay High Court.

However, through separate orders, the Supreme Court dismissed Gumber’s petition as well as the central government, Sachar and Mehrotra’s pleas.

While jointly dismissing the central government, Sachar and Mehrotra’s pleas on 13th December, the Supreme Court bench comprising of Justices Nariman and Bhat had allowed the Union of India to file a Review Petition before the Bombay High Court on the limited issue of GST evasion by Dream11 within four weeks.

The central government’s review petition came up for hearing on 28th January, but its contentions on the GST issue did not find much favour with the bench comprising of Justices Ranjit More and SP Tavade.

The matter is now scheduled to come up for hearing on 11th February, 2020, with the Additional Solicitor General of India expected to lead submissions on behalf of the central government.

Importantly however, with the Supreme Court’s dismissal of Sachar’s application and its categorical assertion in the order that the issue of gambling with respect to Dream11 cannot be revisited, there remains little doubt about the legality of fantasy sports in India.

Categories
Gaming

Virat Kohli is MPL’s Brand Ambassador for Another Year

Mobile Premier League (MPL) has renewed its association with its brand ambassador and Captain of the Indian Cricket team Virat Kohli for another year, as reported by Exchange4Media.

Virat was first signed on as MPL brand ambassador for a year in March 2019, when the company launched various video campaigns with the cricketer to gain momentum for the platform before Indian Premier League. In April 2019, a TVC campaign #GameKheloHeroBano featuring Virat was launched. MPL had about 25 million registered users in April 2019, and at present it has about 32 million registered users and over 5 billion gameplays.

Recently, MPL launched a 75-second video campaign that was shot in Mumbai, where Virat met and spoke with the top 10 winners of the ‘Meet Virat’ contest on the platform. That video went viral on social media. MPL offers fantasy, prediction and virtual games of skill and cricket.

In reference to the renewal of Virat’s association with the brand, he said,  “I am happy to announce that I have renewed my association with Mobile Premier League (MPL). In just over a year, I have seen this young Indian startup grow and reach fans across India. I look forward to supporting them in achieving their goal of being the number one gaming company in India.”

Jogesh Lulla, COO, Cornerstone Sports, which manages Kohli said, “MPL is a young company with exceptional leadership and is on track to become the largest e-sports platform. Our partnership thus far has been fantastic and we look forward to helping them grow from strength to strength along with Virat.”

“We are honoured and privileged to have Virat continue his association with the MPL family. With his love and support, we have started to march towards our goal of democratising esports and skill monetisation across India. Virat, his persona, and his positivity resonates across our youth, and along with him, we are looking forward to doing our bit to empower the immensely large talent pool in our country,” said Sai Srinivas, Co-Founder and CEO, MPL.

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Legal & Regulatory

Gurdeep Sachar moves SC seeking Clarification on Dream11 GST matter, Centre battles it out in HC

Haryana Consumer Forum penalises Dream11

Mumbai-based advocate Gurdeep Singh Sachar, who had unsuccessfully filed a Public Interest Litigation (PIL) and Supreme Court appeal against Dream11, has once again moved the apex court seeking clarification on the scope of its order dated 13th December, 2019.

Sachar in his application for clarification has stated that while dismissing the order, the Supreme Court gave permission to the Union of India to file a review petition only on the issue of GST. In his application, Sachar has stated that ‘it would be just and expedient if the said Order dated 13.12.2019 passed by this Hon’ble Court is appropriately clarified/modified so that the even [sic] the first issue whether the activities of Respondent No. 3 (Dream11) amounts to Gambling/Betting can be reviewed at least for deciding the issues of GST.’

Sachar’s plea is slated to come up for hearing before a division bench of Supreme Court comprising Justices Rohinton F. Nariman and S. Ravindra Bhat on 31st January, 2020.

It may be noted that Sachar had originally filed a PIL in the Bombay High Court in April 2019 alleging that online fantasy sports operator Dream11 conducts gambling operations and wrongly pays Goods and Services Tax (GST) only at the rate of 18% on the margin retained by the company, instead of 28% on the face value of bets under Rule 31A of the Central GST Rules.

A division bench of the Bombay High Court comprising of Justices Ranjit More and Bharati Dangre had dismissed Sachar’s petition and ruled in Dream11’s favour on 30th April, 2019.

Sachar as well as the Union of India, State of Maharashtra and activists Varun Gumber and Avinash Mehtrotra had filed appeals/applications against the order of the Bombay High Court.

However, through separate orders, the Supreme Court dismissed Gumber’s petition as well as the central government, Sachar and Mehrotra’s pleas.

While jointly dismissing the central government, Sachar and Mehrotra’s pleas on 13th December, the Supreme Court bench comprising of Justices Nariman and Bhat had allowed the Union of India to file a Review Petition before the Bombay High Court on the limited issue of GST evasion by Dream11 within four weeks.

Accordingly, the Union of India has filed a review petition in the High Court, which had been listed for hearing before the Bombay High Court today, post which a division bench comprising Justices Ranjit More and SP Tavade, while seeming disinclined to revisit the issue of whether Dream11’s game format amounts to gambling or is a game of skill, directed the registry to verify and place the matter before the appropriate court.

The centre’s review plea is expected to come up for hearing in the High Court in February 2020.

Categories
Business

Dream11 Likely to Raise $500 Million in a Funding Round Led by Tiger Global

Rajasthan HC clean chit to Dream11

Dream11, India’s first gaming unicorn, is looking at raising $500 million in a funding round that is likely to be led by Tiger Global Management, a New York-based startup investor that is actively investing in India. Tiger Global Management is likely to lead the funding round for Dream11 at a valuation of $2.5 billion, as reported by LiveMint.

The ace investment fund, which has invested in other Indian unicorns like Flipkart and Byju’s,  is expected to invest $200 million in Dream11 through purchase of new shares and in a secondary market transaction by purchasing shares from the fantasy sport platform’s previous investors Kalaari Capital, Think Investment and Multiples.

As per an anonymous investor, who spoke with LiveMint, Dream11 has caught the eyes of a lot of investors, as it has no major competitors while having a lot of avenues of growth.

Apart from fantasy gaming, Dream11’s parent company Sporta Technologies Private Limited is expected to foray into other sports related business ventures, including live-streaming of sports matches and a platform for sale of sports-related merchandise.

For the said funding round, Dream11 is said to be working with the investment bank Credit Suisse.

In April 2019, Dream11 was valued at $1.1 billion, making it the first Indian gaming company to join the Unicorn club, after London-based Steadview Capital invested $60 million in the company through a secondary market transaction.

Dream11 is the official fantasy gaming partner of various leagues and tournaments like ICC, IPL, ISL, Pro Kabaddi league, and Big Bash league.

In April 2019, Bombay High Court passed an order stating that the company’s gaming format is skill-based and it even approved the company’s manner of payment of Goods and Services Tax (GST), relying on a 2017 Punjab and Haryana High Court decision and other Supreme Court precedents.

Various Special Leave Petitions (SLPs) were filed in Supreme Court against the Bombay High Court order, out of which the one filed by lawyer Varun Gumber was dismissed by the apex court through an order dated 4th October, 2019 and the others were dismissed  in December 2019 by a division bench of the Supreme Court comprising of Justices Rohinton Nariman and S. Ravindra Bhat.

Another PIL against Dream11 has been pending in the Bombay High Court, since April 2019, alleging that Dream11 has indulged in tax evasion. The PIL is yet to be listed and heard by the court.

Categories
Legal & Regulatory

Another PIL against Dream11 pending in Bombay HC

More legal troubles for Dream11?

Although the Bombay High Court dismissed a petition alleging that leading fantasy sports operator Dream11 was involved in gambling and Goods and Services Tax (GST) evasion on 30th April, 2019, another PIL filed against the central and state government, Dream11 and its founder directors Harsh Jain and Bhavit Sheth has been pending since 5th April, 2019.

The petition filed by lawyer Pooja Rajendra Pandey alleges that Dream11 has been indulging in tax evasion and has not paid Goods and Services Tax (GST) at the rate of 28% as required under Rule 31A of Central GST Rules.

Pandey’s petition further alleges that Dream11 merely provides an ‘acknowledgement’ to users for entry fees it receives, which is deposited with the company’s escrow agent, while a tax invoice is issued only for the GST paid on the margin/platform fees charged by Dream11.

The PIL further prays that Dream11 be asked to pay all its GST dues including interest and penalties on the face value of the entry fee on past and present transactions.

Pandey’s petition is however still listed as pending on the Bombay High Court website and the defects of the petition are not yet cured. Notably however, the Bombay High Court has already ruled that there is no GST evasion by Dream11 in a later PIL filed on similar grounds by Advocate Gurdeep Singh Sachar.

Ultimately, the matter was appealed to the Supreme Court by Sachar and the Union government. The apex court while dismissing Special Leave Petitions (SLPs) on 13th December, 2019 allowed the Union of India to file a review petition with the Bombay High Court on the limited grounds of challenging the observations giving clean chit to Dream11 on the issue of manner of payment of GST.

The Supreme Court further stated that the Bombay High Court would have to hear the review on merits if it was filed within four weeks from 13th December, 2019.

It remains to be seen if the central and state governments file review petitions challenging the order of the Bombay High Court in Sachar’s case or if the court decides to hear Pandey’s PIL on merits.

Categories
Legal & Regulatory Poker

Gujarat HC Defers Poker Matter to 17th February

Poker to see conclusive ruling in 2020?

The Gujarat High Court once again deferred the hearings of letters patent appeals filed against a single judge bench’s order ruling poker to be a game of chance.

A division bench of the High Court comprising of Chief Justice Vikram Nath and Justice AJ Shastri did not hear the appeals that were scheduled for arguments on 8th January, 2020. The court instead adjourned the matter to 17th February, 2020 and observed that daily hearings would be conducted from that date to expedite hearings in the matter.

Letters patent appeals filed by Indian Poker Association Secretary KN Suresh, Dominance Games Private Limited, Aman Chhabra and Hotel Ramada, Ahmedabad against a December 2017 single judge bench’s order ruling poker to be a game of chance  have been pending for over two years now and have seen 22 adjournments till date.

With the court deciding to expedite hearings in the matter from February 2020 onwards, the possibility of getting a conclusive verdict on the legality of poker has increased. The high stakes matter would have implications on the skill games industry within the state of Gujarat and also have wider ramifications for the industry across the country.