Fantasy Sports in India: Legal Skill Game or Hidden Gambling?

Fantasy sports, where fans pick virtual teams of real players, have boomed in India. Apps like Dream11, MyTeam11 and MPL let millions of users join contests during live matches. Industry experts say the Indian market is huge: KPMG estimated a 32% annual growth, reaching about $3.7 billion by 2024. Cricket fans especially have flocked to these games. Every day, players pay entry fees for a chance to win cash prizes. Yet this rise has brought a big legal debate: Are these games just skill-based competitions, or a new form of gambling? The key question is skill versus chance. Is winning the result of analysis and strategy, or mostly luck? Courts, governments and users have wrestled with this for years. Here’s a deep look at the issue with all facts and cases sourced from legitimate reports and judgments.

The Fantasy Sports Phenomenon

Fantasy sports blend real sports stats with virtual gaming. Users create their “teams” by selecting players from upcoming matches. For example, in a cricket contest the player might pick 11 real cricketers under a salary cap. The fantasy team scores points based on how those players perform on the field (runs, wickets, catches, etc.). Those with the highest points win money or prizes.

This concept caught on fast in India. Tournaments and leagues across cricket, soccer, kabaddi, and more are now mirrored in online fantasy contests. Even small entry fees (₹10 or so) can win big rewards if your picks do well. The All-India Federation of Fantasy Sports reported millions of active users and billions in entry fees. In short, fantasy sports are now big business and a part of sports culture in India.

How Fantasy Sports Work

A typical fantasy contest goes like this: Before a match, users log in and draft a virtual team from the list of all players in that match. They might study past performance, pitch conditions, or player form to decide. Once the match starts, the fantasy app tallies points for each fantasy team based on the real athletes in game stats. At the end, the highest-scoring virtual teams win prizes (often cash).

Importantly, users do not bet on the match outcome itself. They bet on player performances. A Dream11 legal brief explained that users merely act like selectors choosing a team, and winners are determined by accumulated statistics not by, say, the toss result or final score. Users can’t alter their team after the play begins. In that way, fantasy sports resemble a test of management and skill: predicting which players will excel.

·      Knowledge and Strategy: Players research statistics, compare players’ averages, strike rates, bowling economy, fitness and recent form. They assemble teams to maximize total points under a budget.

·      Skill Factor: To do well, users often rely on deep knowledge of the sport and analytical thinking. Some studies (including by IIM Bangalore and MIT) found that experienced players consistently outscore novices, suggesting skill rather than luck drives the results.

In short, fantasy sports operate on the idea that informed choices yield rewards. But critics counter that chance still plays a role in early wickets; an unlucky drop, or a coin toss can derail the best-constructed team. This clash, skill vs luck, is at the heart of the legal debate.

Skill vs Chance: The Debate

Are fantasy sports more like chess or a roll of dice? Supporters of fantasy leagues stress the skill side. Critics warn about the chance side. Let’s unpack both views.

·      Example- Ludo Dice symbolizes the element of chance and unpredictability in games of chance. Critics point out that money is on the line, and any random event can swing results. They argue: if a key player gets injured early, or if unexpected luck favors other teams, the fantasy outcome can seem arbitrary. The entry fees and cash prizes resemble betting. Detractors say it’s easy to feel like gambling: after all, players pay money for uncertain rewards.

·      Example- Chess pieces representing strategy and skill qualities emphasized by fantasy sports proponents. Fans and companies highlight the strategy involved. They note that users must make many detailed decisions: picking a captain worth double points, balancing a team’s strengths, and leveraging statistical insights. They say fantasy is fundamentally about knowledge and planning, not pure randomness. For example, the Punjab & Haryana High Court observed that fantasy sports require “superior knowledge, judgement, and attention” and that success depended on analysis of hallmarks of skill. Courts have often compared them to managed competitions.

Legal perspective: Indian law traditionally distinguishes games of skill from games of chance. Under longstanding rules, pure chance games (like lotteries or roulette) are treated as gambling. But games where skill predominates (like chess or rummy) are generally legal. The “preponderance test” (from a 1957 Supreme Court case) asks: does skill outweigh luck? If yes, it’s a skill game.

The Supreme Court has said that as long as skill is the “dominating factor” or more than 50% of the outcome, it is a skill game . Justice has ruled that chance-based games stay banned, but skill-based games are exempt from gambling laws.

So, this debate context matters. The law looks at the actual mechanics, not just the stakes. In India, such rules have already been applied in cases about Rummy cards and horse racing. Let’s review those precedents.

Key Legal Tests and Precedents

Indian courts have set a clear test: examine the facts and see whether skill truly dominates the game. Several landmark judgments guide this:

·      Chamarbaugwala (1957) – India’s top court held that if a contest relies “preponderantly” on skill, it isn’t gambling. This established the preponderance test, protecting even moderate-stakes skill contests.

·      Satyanarayana & Ors (1968) – The Supreme Court ruled that Rummy is a game of skill, not a chance. It recognized that memory and tactics in card play give skill an edge.

·      K.R. Lakshmanan v. State of TN (1996) – Here, the Supreme Court famously held horse racing to be a game of skill. It noted that judging a horse’s form and a jockey’s skill is crucial, not just luck.

·      Law Commission Report (2019) – The Law Commission noted that games involving skill for bets should be legalized. This reflects a policy leaning towards treating skill-based games as legitimate.

Indian law has long distinguished skill games from pure chance. As one commentary explained, “Indian law has made an important distinction: games that require skill, judgment and strategy (like chess or certain card games) are treated differently from pure gambling games (like lotteries).”

Dream11: A Case Study

Dream11 is India’s biggest fantasy sports platform. It has faced several legal challenges. Courts in India have repeatedly examined whether Dream11’s contests are skill or gambling. Here is the timeline of major rulings:

1.    2017 (Punjab & Haryana HC) – In Varun Gumber vs. Chandigarh, the High Court became the first Indian court to rule on fantasy sports. It found that fantasy contests involve “considerable skill” players must evaluate athletes’ strengths, study stats, and use strategy to set their teams. The court treated Dream11 contests as games of skill. Shortly after, the Supreme Court refused to entertain appeals (SLPs) against this ruling, effectively sealing it.

2.    2019 (Bombay HC) – A Public Interest Litigation in Bombay questioned Dream11’s GST classification and its gambling nature. The High Court took cue from the Punjab & Haryana ruling and held that Dream11 games are skill games. It quashed the PIL and observed that Dream11’s contests require genuine skill and judgement, not gambling. It also noted that user earnings are based on points from real-match performance, not on betting outcomes.

3.    2020 (Rajasthan HC) – In another case, the Rajasthan High Court reaffirmed the earlier decisions. It stated clearly that treating Dream11’s format as gambling “is no more res integra” (no longer an open question). Dream11 contests, the court said, involve no gambling ingredient, and the special leave petitions against earlier decisions had already been dismissed.

4.    2021 (Supreme Court) – Ultimately, the Supreme Court of India dismissed the pending special leave petitions regarding Dream11. In doing so, it effectively upheld the conclusions of all the High Courts: Dream11’s online games are predicated on skill and do not amount to gambling. The Court noted that success depends on “superior knowledge, research, and judgment,” not mere luck.

These rulings mean that, so far, India’s judiciary has consistently recognized fantasy sports (at least as operated by Dream11) as lawful skill games. As one lawyer observed, each high court verdict “affirmed the legality of real-money skill games in India”. For example, the Karnataka High Court later cited this momentum when it struck down a state ban, calling the Dream11 story a validation of the industry’s legitimacy.

State Laws and Recent Developments

Because gaming is mainly a state subject in India, different states have taken varied stances on fantasy sports. Some have embraced it, others have banned or restricted it:

Permissive States: Maharashtra, Karnataka, Delhi, Punjab and others have not banned fantasy sports. In fact, the Karnataka High Court upheld that such skill games are lawful.

Restrictive States: Andhra Pradesh, Telangana, Assam, and Odisha have enacted laws that ban or limit online games involving stakes. For example, the Andhra Pradesh Gaming Act (1974) and Telangana Gaming Act (1974) were amended in 2017 to include all online games with stakes (not just casinos) effectively outlawing paid fantasy contests in those states. The Odisha and Assam governments also banned paid online gaming. These bans were put in place before many court rulings on fantasy sports came out. Even as of 2025, these states “still prohibit or restrict online fantasy sports” under their local laws.

High Courts Strike Down Bans: In 2022, two important High Court rulings challenged state bans:

·      Karnataka HC (All India Gaming Federation v. State of Karnataka, Feb 2022) struck down the Karnataka government’s amendments that criminalized all online skill gaming (except horse racing) as unconstitutional. The court said the law was arbitrary and infringed fundamental rights.

·      Madras HC (Junglee Games v. State of Tamil Nadu, Feb 2022) struck down Tamil Nadu’s blanket ban on online gaming as violative of citizens’ right to work. It explicitly recognized fantasy games as a form of business protected by Article 19(1)(g).

These rulings meant that even state laws banning fantasy sports were under legal scrutiny.

Central Online Gaming Act (2025): In a dramatic turn, the central government passed a new law in August 2025 called the Promotion and Regulation of Online Gaming Act, 2025. This Act outlaws all online real money gaming nationwide, including fantasy sports with entry fees. It scrapped the traditional skill/chance test that courts have relied on for decades. In fact, one legal analysis noted it “throws out a rule that has been used to regulate gambling for more than 50 years”: since 1867 Indian law has always exempted skill games, but the new Act removes that distinction.

The gaming industry has strongly challenged this law. Critics say it oversteps state powers (gambling is a state matter) and erases judicial precedents. As an expert wrote, the Act “overturns five decades of rulings” on skill vs chance. High courts in various states have already stayed or struck parts of this Act, and a Supreme Court review is pending. Meanwhile, major platforms like Dream11 have preemptively suspended cash contests to comply with. The immediate future of fantasy sports in India is thus in flux due to this sweeping ban.

Global Perspective

1.    United States: At the federal level, fantasy sports got a special carve-out in the 2006 Unlawful Internet Gambling Enforcement Act (UIGEA). That law specifically exempts fantasy sports that meet certain conditions, effectively treating them as skill-based games. American courts have generally agreed. For example, in Humphrey v. Viacom (2007), a New Jersey court explicitly held that fantasy sports are games of skill: outcomes depended on a participant’s choices of players and lineup strategy. Many U.S. states now allow daily fantasy contests (with licenses), though a few had bans or investigations (New York famously debated it in 2015-16 but later legalized under strict rules). In practice, DFS (daily fantasy sports) is widely considered legal in the U.S., and major platforms operate there under state gaming regulators.

2.    United Kingdom and Europe: The UK Gambling Act 2005 generally, treats paid fantasy contests as gambling. Operators like DraftKings must hold a UK license to operate there. Similarly, Spain and France regulate fantasy sports under their betting laws. For instance, Spain explicitly classifies fantasy sports as a form of “pool betting” (gambling) under its gaming law. By contrast, Malta, a key EU jurisdiction for gaming exempts games of skill. Since 2017, Malta’s regulations have specifically treated fantasy sports as skill-based games.

3.    Other Countries: Approaches vary worldwide. Some countries like Australia consider cash-prize fantasy contests gambling (if they mirror sports betting). Others, like Canada, generally allow them. The U.S. example illustrates that with clear rules; fantasy sports can be permitted. In Asia, the picture is mixed: Pakistan and Bangladesh ban all gambling (including most fantasy games), while Sri Lanka has debated limited exceptions.

In summary, global trends show that where skill is emphasized, fantasy sports survive. But regulatory clarity matters: some nations regulate them like casinos; others carve exceptions. India’s debate echoes these global questions, but with local twists.

Conclusion

Fantasy sports in India sit at the crossroads of innovation and law. On one hand, courts have repeatedly said Dream11-style games are driven by skill, not mere luck. On the other hand, some state laws and the new federal gaming ban treat them like gambling. Right now, the question of “skill game or hidden gambling” is being tested in legislatures and courtrooms more than ever.

For players and operators, the key advice is to watch developments closely. If your strategy relies on study and analysis, you’re likely within the skill camp. But beware of locations where local laws remain strict (Andhra Pradesh, Telangana, Assam, Odisha). In practice, most of India deems fantasy sports lawful for now, but the new 2025 Online Gaming Act threatens to change everything.

The final word will come from India’s Supreme Court or future legislation. Until then, fantasy continues. For more insights into how cross-border rules and technology laws intersect with business and gaming, check out our Cross-Border Contracts and Technology Law sections we keep a close eye on cases and regulations around the world.

If this debate intrigues you, and you want deeper insights on how online gaming intersects with legal frameworks, cross-border contracts, or technology law, you should check out SolvLegal. At SolvLegal.com, you can explore expert legal commentary, stay updated with regulatory changes, and get professional advice on navigating this evolving space.

FAQs: Fantasy Sports in India

1. Are fantasy sports legal in India?

Yes. Multiple High Courts and the Supreme Court have held that fantasy sports like Dream11 are games of skill, not gambling. However, a few states (e.g., Andhra Pradesh, Telangana, Assam, Odisha) still restrict or ban paid online games. Recent national regulations have also created uncertainty.

2. Is Dream11 considered gambling in India?

No. Courts have repeatedly ruled that Dream11’s format requires skill, analysis, and strategic decision-making, thus placing it outside gambling laws. These rulings highlight that outcomes depend on player knowledge, not pure chance.

3. What is the “Skill vs. Chance” test in Indian gaming law?

The “Skill vs. Chance” test checks whether skill predominates luck in determining outcomes. If skill is the dominant factor (more than 50%), the game is legally treated as a game of skill, not gambling.

5. Are fantasy sports regulated by the central government?

As of 2025, the Promotion & Regulation of Online Gaming Act introduced a national framework that restricts real-money gaming. It has caused conflict with earlier court rulings. Several legal challenges are underway.

6. Do I need to pay taxes on fantasy sports winnings?

Yes. Fantasy sports winnings in India are subject to TDS under Section 194BA and the 30% tax on net winnings as per the latest tax rules. Platforms automatically deduct TDS.

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ABOUT THE AUTHOR

This blog is authored by Shridansh Tripathi, a second-year law student at the Department of Legal Studies and Research, Barkatullah University, Bhopal.

REVIEWED BY

This blog was reviewed by Rakshika Bajpai, a corporate lawyer specialising in IPR, contract drafting, and compliance advisory. She is a technology-driven legal professional focusing on corporate compliance and data-privacy frameworks at SolvLegal. Her work spans IT law and cross-border regulatory matters, and she supports businesses in protecting their innovations and strengthening their legal and compliance structures.

https://www.linkedin.com/in/rakshika-bajpai-226a00278/

DISCLAIMER

The information provided in this article is for general educational purposes and does not constitute legal advice. Readers are encouraged to seek professional counsel before acting on any information herein. SolvLegal and the author disclaims any liability arising from reliance on this content.