Uniform Regulation Key to Tapping into the Potential of Fantasy Sports Platforms in India

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Business Wire IndiaThe Dialogue released a research whitepaper on Friday, August 6, titled The Regulation of Fantasy Sports Platforms in India with policy recommendations towards regulating fantasy sports platforms in India.

The report notes that India’s young ‘mobile-first’ population has allowed mobile gaming to thrive. However, dissonance between State regulations in defining ‘games of skill’ and ‘games of chance’ has led to the creation of several pain points for consumers and those within the industry. The whitepaper assumes even more significance given the recent Madras High Court judgement which ruled that States do not have the legislative authority to ban fantasy sports.

The report was released at an event that included eminent experts from the fantasy sports sector in India.

Mr. Rameesh Kailasam, CEO & President IndiaTech.org, stated the following:

“India has a huge potential to tap the digital gaming space with innovative use of technology and a spirit that goes back to ancient times which had a rich and diverse culture of gaming. The Online Gaming space in India is fast growing with large participation from fans and game enthusiasts backed by significant investor participation. This industry is looking to the government in earnest need for regulation to derive the much-needed legitimacy that is unfortunately marred by on-ground misinterpretations. The only form of legitimacy fortunately seems to be coming through multiple Court Rulings that have debated, discussed and understood the various formats and granted the much-needed relief from potential misinterpretations of law.

The Online Fantasy Sports industry has been subjected to multiple such cases wherein the verdicts have been favourably given to formats that have established predominance of skill. IndiaTech.org believes that the format of fantasy sports ensures that sports enthusiasts follow the game more keenly, boosting viewership and higher audience participation that naturally brings in more focus, investments, sponsorships to the sport benefiting sports infrastructure development and higher remuneration to the players of that sport.

The Report by The Dialogue on Online Fantasy Sports outlines key challenges and the constant need for the industry to discuss and work towards recommending solutions that would lead to creation of a policy and regulatory framework that would support startups emerging in this sector.”

Over the course of the research, the report identified that the absence of regulation has led to fragmentation within the industry. In order to create a harmonising framework that also brings in a necessary degree of homogeneity, the report recommended that collaborative legislation enacted by the Centre is essential. However, bearing in mind the dynamic nature of the industry and the immediate need for regulation, it is suggested that the Centre issue ‘model guidelines’ that the states can individually adopt.

Mr. Amrit Mathur, Member of Advisory Council, Federation of Indian Fantasy Sports (FIFS), pointed out that, “For Indian sport, the emergence of fantasy sports is a major development … Makes the fan a central element of sports. BCCI joining with fantasy sports operators is evidence of credibility and significance of this industry … Revenue and sponsors are going to emerge from this industry, to support and sponsor [the same]. It is significant that fantasy sports has the financial muscle to sponsor mainstream mega sports events like the IPL.”

The implementation of model guidelines will not only allow for the industry to be backed by a parent Ministry but will also enforce a bright line test to identify games of skill in order to do away with the regulatory uncertainty within the industry.

Nehaa Chaudhari, a partner at Ikigai Law, pointed out that, “The challenge in understanding games of chance is the criteria used for understanding skill and chance … Because the test is subjective, we’re seeing a subjective application of criteria … When something is ‘predominantly’ a game of skill, [it’s] given the go-ahead, but we need to bring in objectivity to the interpretation of what exactly ‘predominantly’ means.”

The report also points out that a Self Regulatory Organisation (‘SRO’) will create a regulatory environment that not only encourages light-touch regulation but will also allow those within the industry to benefit from the experience and technical expertise of several stakeholders.

Mr. Roland Landers, CEO, All India Gaming Federation said, “The chief objective of self regulation is two-pronged– one is looking at how the responsible gaming mechanisms can play out, and the second is the player protection side of it. The AIGF, for example, [has] charters that govern the methodology of the SRO and [institute] certain checks and balances.”

Mr. Vaibhav Kakkar, Partner, Saraf Partners, pointed out that, Ultimately it’s a state subject, much like real estate, so ultimately [just like] you have a model ‘RERA’ law, you’ll have to have a ‘model skill-based framework’ which can slowly become the benchmark.”

Kirti Mahapatra, Partner at Shardul Amarchand Mangaldas & Co, pointed out that, While our experiences might not be similar with other jurisdictions, in terms of regulating online gaming, the Indian government is in a great position to be a trendsetter … India stands at a unique position … We have to look at a composite model … which also has the stamp of authority.” She also pointed out that “The law also has to take into account the fact that what is certain about the industry is that it will always be in flux.

In considering the global regulatory practices of fantasy sports, the report remains mindful of the fact that the perception of fantasy sports varies across cultures. It noted that India can be one of the first in Asia to have a regulatory regime that allows fantasy sports to flourish while developing a safe and encouraging environment for consumers as well.

The detailed report can be found here: https://thedialogue.co/wp-content/uploads/2021/08/Report_Fantasy-Sports-Final.pdf