7 Sep 2020 Patrick

Dream11 Faces New Legal Challenge in Supreme Court

Dream11 faces new legal challenge

New IPL sponsors Dream11 face a fresh legal challenge after a Special Leave Petition (SPL) was filed in the Supreme Court last Thursday.

The SPL challenges a February 2020 Rajasthan High Court order that dismissed a Public Interest Litigation (PIL) that had tried to stop 'illegal betting and gambling activities by fantasy sports operators Dream11'.

The SPL has been filed by social activist and financial consultant Avinash Mehrotra. His petition argues Rajasthan High Court dismissed a PIL filed by Chandresh Sankhla based on orders passed by the High Courts of Bombay, and Punjab and Haryana that said fantasy sports are 'games of skill and do not amount to gambling'.

Mehrotra's SLP wants the Supreme Court, which stayed in March a 2019 Bombay High Court Order in favour of Dream11, to be examined in depth.

Dream11 has previously managed to win two High Court verdicts in its favour. Justice Amit Rawal of Punjab and Haryana High Court dismissed a writ petition filed by advocate Varun Gumber in April 2017 in rapid time.

It rejected Gumber's petition saying that fantasy sports do not fall under gambling as it involves considerable skill. The order, alleges lawyers in the know of things, was a 'cut and paste' of the reply given by Dream11, according to a report at Outlook India.

In 2019, Gurdeep Singh Sachar's criminal public litigation in Bombay High Court wanted the court not only to declare fantasy as a game of chance, but also that Dream11 should pay GST at 28% instead of 18% that it had been paying since 2012.

A division Bench of Justice Bharati H Dangre and Ranjit More dismissed the petition without even waiting for the government of Maharashtra and Union government to file their replies. Both Justice Rawal and Justice More are 'in exile' after issues of integrity were raised against them.

Dream11 has cultivated close ties with powerful allies in India and beyond. It has received funding from Chinese goliath Tencent, is a major ally of the Indian Cricket Board, and has commercial relationships with at least six of the eight IPL franchises.

The firm caused a minor surprise when it won the bid for IPL 202 title naming rights.

After its latest fundraising stage is completed, Dream11 could be worth a whopping US$2.5 billion making it a global player in the world of fantasy sports and, to its opponents, increasingly untouchable, with the power and money to win any challenges against it in the courts.

Mehrotra's SLP could be heard as early as next week and clearly makes the case that fantasy sports should be treated as gambling, and thus illegal. Eyes will be on the Supreme Court once again for their decisions. And it won't be just the anti-gambling advocates looking out for the verdict.

Companies themselves are desperate for more clear regulations and guidance as the online gaming industry in India continues to boom.

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