LEGALITY

Key Points

KHELPUNCH is a fantasy sports platform,operated by Khelpunch sports technologies private limited.Khelpunch is a Game of Skill platform thus services and fun features(including cash contests)offered by Khelpunch don’t fall under gambling.Because in game of skill users use their knowledge of game,analysis and analytical skills,application of mind to participate and win.Thats why fantasy sports do not fall under gambling as user’s analysis and analytic skill play dominate role rather then mere chance of luck to win any pay to play contests/leagues.

Khelpunch comply with all central and state legislations in India to ensure that our users are completely protected. Each contest on our platform is cautiously designed to obey with valid verdicts and regulations in India.

Below are the key points from an Indian High Court’s judgement particularly regarding the fantasy games. A challenge to this judgement was dismissed by the Supreme Court of India as well.

The Court, in its ruling, stated that playing the fantasy game involves substantial skill, discretion and judgement and that success in fantasy games arises out of users’ use of the platform, superior knowledge, judgment and focus.

The Court held that ‘the element of skill’ has main influence on the result of the fantasy game, which follows the following format:

Users must select a team consisting of at least the same number of players as playing in a real-life cricket team (e.g. 11 players ).

All contests are run for the duration of one full sports match.

No team changes are permitted by users after the beginning of the sports match.

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).

Finally, the Court held that the online fantasy games are legitimate business activities protected under Article 19(1) (g) of the Constitution of India.

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.

Laws governing games of skill in India

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 for public gambling and keeping of common gaming-houses”.So The PGA 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.

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.

Hence, The laws in Assam, Andhra Pradesh, Odisha, Telangana, Nagaland and Sikkim are unclear on games of skills that may be played for a fee. So, residents of these states are not permitted to join any cash contests on Khelpunch.

*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.

This game involves an element of financial risk and may be addictive.please play responsibly at your own risk.