Top 5 Developments of 2019: Online Gaming’s Legal Challenges & Benchmark Verdicts

Top 5 Developments of 2019 - Benchmark Legal Verdicts
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  • Namita Ghosh January 1, 2020
  • 2 Minutes Read

As we recap the top five developments for poker in 2019, it’s imperative that we take a look at the legal challenges and the benchmark verdicts that made an impact!

The most significant of these was the Supreme Court’s verdict in the Dream11 case that by dismissing the appeals filed by the state and central government settled once and for all that fantasy sports are skill-games and can be offered for real money. Moreover, the apex court`s acceptance of Dream11`s manner of GST payment was a huge plus for the entire gaming industry.

On the flip side, the future of poker in Gujarat continues to remain in a limbo, where pending litigations made little headway. Nonetheless, favorable verdicts by the Jalpaiguri Circuit Bench of the Calcutta High Court and news that Goa’s long-awaited Casino Policy could be tabled sometime later this month signal towards a bright year ahead!

 

Supreme Court Upholds Fantasy Sports as Game of Skill, Accepts Manner of GST Payments

One of the most significant judgments pertaining to the domestic gaming sector dates back to 1967, when the Supreme Court while hearing the State of Andhra Pradesh vs. K. Satyanarayana, upheld that rummy is a game of skill, irrespective of the format, venue, and stakes involved.

Supreme Court
Supreme Court

The gaming industry got a significant shot in the arm in April this year when a division bench of the Bombay High Court dismissed a Public Interest Litigation (PIL) by Gurdeep Singh Sachar against fantasy gaming giant, Dream11. The bench comprising of Justices Ranjit More and Bharati Dangre called Sachar’s claim that Dream11 was hosting games of chance or ‘gambling’ “untenable, misconceived, and without any merit.”

The bench ruled that since the fantasy leagues do not amount to ‘gambling’ or ‘betting,’ Dream11 was not evading GST and accepted the company`s method of GST payment of 18% of the fee (rake) collected.

Part of the judgment read – “Fantasy league do not amount to ‘gambling’ or ‘betting’ or ‘wagering’ even if the definition contained in Finance Act, 1994 is taken into consideration.”

This decision was subsequently challenged by the Union Government, Government of Maharashtra, and several others in the Supreme Court. In a landmark ruling on December 13, Justice Rohinton Nariman of the Supreme Court dismissed all the appeals, settling once and for all, all doubts surrounding fantasy sports being games of skill. Justice Nariman pointed out that there cannot be any doubt that fantasy sports are a game of skill, and the individual who enters the contests needs to apply his mind and judgment.

This verdict effectively future-proofed not only fantasy gaming but also other real-money games of skill like rummy and poker against similar legal challenges in the future. More importantly, its acceptance of the GST computation followed by Dream11 set the record straight for the entire industry!

 

Gujarat: Future of Gaming Still Hangs in the Balance

Gujarat is one of the states that are on the brink as far as poker and other forms of real-money gaming is concerned. In 2017, following a police raid on poker clubs in Ahmedabad, KN Suresh and IPA filed a civil petition at the Gujarat High Court.

Gujarat High Court
Gujarat High Court

The Court, however, rejected the petition that sought that poker be recognized as a game of skill and stated that poker amounts to gambling and cannot be permitted. The judgment had a devastating effect on the state’s real-money gaming sector, and most of the online poker sites also stopped accepting players from the state.

Suresh subsequently appealed against the decision, and several more stakeholders, namely Aman Chhabra, Dominance Games Pvt Ltd., and Hotel Ramada, also filed letters patent appeals. Despite their efforts, the case has been repeatedly adjourned by the Court. Day-to-day hearings were to be initiated on December 18, but the Court could not take up the appeals on the scheduled date.

KN Suresh
KN Suresh

In April, the state police even requested the State Home Department to amend the Gujarat Prevention of Gambling Act and introduce new legislation to ban all forms of online gambling in the state, including poker.

While the State government has given no indication that it will follow through on the police’s efforts for a blanket ban on online gambling, there is still hope that the Court may provide a favorable decision on the appeal petitions. The hearing for the same has been rescheduled for January 8, 2020, and it is expected that the Court will likely conduct a daily hearing on the appeals thereon.

 

Calcutta HC’s Jalpaiguri Circuit Bench Reiterates Poker is a Game of Skill

West Bengal has been one of the frontrunners in giving the green-signal to real-mney gaming and poker. However, in August, police raided a hotel in Siliguri where poker was being conducted by the IPA and objecting to the same, the IPA filed a case in the Calcutta High Court.

Jalpaiguri Circuit bench of Calcutta High Court
Jalpaiguri Circuit bench of Calcutta High Court

For the second time to-date, the IPA was able to successfully obtain a favorable judgment by the Calcutta High Court’s Jalpaiguri Circuit Bench. On August 29, the single judge bench of Justice Sabyasachi Bhattacharyya upheld the Calcutta High Court’s 2015 ruling, which stated that poker cannot be considered as gaming or gambling and anyone indulging in playing the game was not committing an offense. Justice Bhattacharyya also reaffirmed that police could not interfere in any game of poker being played at venues unless it had a specific complaint that any unlawful activity was being conducted in the garb of the game of poker.

 

Goa: Awaiting Casino Policy & Offshore Casino Relocation

Goa is one of the only two Indian states to allow casinos to operate on offshore casinos and at Five-Star properties. Owing to public protests over the presence of casinos on River Mandovi, the government has long-promised a permanent land-based location to move the casinos and a Casino Policy to regulate the sector.

Goa Casinos

Though under-development Mopa Airport complex was identified as the permanent land-location for casinos, not much headway was made in this direction over the past year. The government explored the possibility of temporarily moving the offshore casinos to Aguada Bay and some to the Veerem side of the river. Still, both efforts met with severe local and political opposition.

Amid the continued state of limbo, December brought in welcome news that the government was planning to table the Casino Policy in January 2020, and an amendment to the Goa, Daman, and Diu Public Gambling Act, 1976 could be accordingly presented for approval in the budget session.

Alongside these benchmark verdicts were several other ground-breaking developments that rocked the industry, and will be covered in more insightful features coming up next!

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