Though the legal status of online fantasy sport gaming remains unclear, it has reached great heights with IPL and the on-going World Cup – becoming a $1 billion market
In India, sports betting is deemed illegal and lottery is a regulated business under state control; whereas, in countries like UK, funds from sports betting is used to support elite sports, training and exposure of athletes. Besides, funds from lottery have played an important role in funding sports development in China, UK, South Africa etc. Now, the question is whether sports betting can also be regulated in India and whether funds from sports betting and lottery could also support development and funding of sports like in many other countries.
Gambling is a generic word to describe the activity of placing wages on particular outcomes or events, while betting refers to an agreement between two parties where one party makes a prediction and loses or makes money if her/his prediction turns true. The other party forfeits the amount waged or has to return many times more as per the agreement.
Legalising betting in cricket has been a subject of debate in India for many years. After IPL 2013’s spot-fixing controversy, the Lodha panel, appointed by the Supreme Court to suggest reforms for BCCI, took a realistic stand on the matter. In their January 2016 report, the panel said lawmakers in the country should enact laws to legalise betting. However, players, match officials and cricket administrators should not be allowed to indulge in the same.
All India Gaming Federation (AIGF) CEO, Roland Landers, along with an advisory panel, stated that if we allowed legal betting, bookmakers who run the business (operators), would set heavy odds on the day’s match. If you know it’s a tougher team and you put your money on that team, then you know your odds will be less. For instance, if you put Rs 100 on a tough team, you know you’ll get Rs 125 back. However, if you put your bet on the weaker team and that team wins and you had bet Rs 90 on it, you’ll get Rs 190 back. So your risks are more there. The operators set those standards and then people go on to the website and place their bets. When it is legalised, a lot of agencies would be involved because the guy who loses the maximum money is the operator, the bookmaker.
If there is an extraordinary situation and you see that a huge bet is placed on the weaker team with odds entirely set on this team, then we’ll know this isn’t normal. If you place a bet on the tougher team, you at least know you’ll get some return, but in such an extraordinary case there will be checks and balances to prompt the audience that something is wrong. And the activity will be immediately stopped.
Supreme Court of India is due to rule on this matter, and the decision has been postponed at least twice. This case is important to companies like Dream 11, because, they argue, building a fantasy league is a game of skill. Therefore, it is legal for players to win money and that should not be considered betting. These fantasy games are not just limited to cricket, but also include football, basketball and kabaddi. In the future, it can also hook up hockey, given that there has been a steep rise in audience’s engagement with the sport through these fantasy games.
After signing a four-year sponsored deal with BCCI, Harsh Jain, chief executive and co-founder, Dream11, said, “We are very excited to partner with the BCCI and provide an engaging cricketing experience for the IPL, which is the pinnacle of sports leagues in India. Dream11 is deeply integrating with the IPL, which is set to grow from its 1.4 billion TV impressions and 200 million online viewers in 2018, to achieve our goal of growing from 51 million users to 100 million users in 2019. It’s great to see how our dream of making fantasy sports intrinsic to sports fan engagement has come true.”
According to a report drafted by KPMG, the online gaming industry in India is expected to generate a revenue of Rs 11,900 crore by FY 2023. Steadview Capital’s investment has catapulted Dream 11 into India’s first gaming company which has made it to the elite club of privately-held startups valued at $1 billion or more. But the larger question that remains is whether India is on the verge of making betting legal? Having said that, if there is no stopping the phenomenon, why not legalise it?
The Road Ahead
Most countries that have permitted gambling/betting have statutory regulatory bodies/gambling commissions created by the state that are responsible for distributing licenses to betting operators. The regulatory body will have an important role in examining license applications from third parties. The national regulatory body (a body at the central level) could regulate disputes, where violation/breach involves more than one state’s jurisdiction. These could be power to void a particular bet, power to prosecute or seek cooperation between states as well formulating guidelines and dispensing information to the public about betting, including listing events on which bets can be placed. The national regulator may have state level chapters.
The regulator will have powers of entry and inspection into the operator’s premises and online networks, and to ensure cooperation from operators. Where problems are detected, the regulator will have powers to impose conditions on operators, together with a range of regulatory remedies from warnings to financial penalties, removal or suspension of a license and even criminal prosecution.