In the recent years, the online fantasy sports sector has seen a great boom in India. Platforms like Dream 11, Mobile Premier League, etc. have become quite popular amongst the general public and the public are actively using and participating in these online fantasy sports platforms (OFSP). India now has the largest online fantasy sports market by user base in the world and the estimated revenue generated by OFSP companies has grown to INR 2470 crores (approx. USD 330 million) in the last five years. As with other online platforms, the growing economic weight of the OFSP sector has prompted calls for regulation and oversight.
Recognizing that there is public interest in the fantasy sports industry receiving Government recognition as an Industry and having its own identity, the NITI Aayog, the premier policy think tank of the Indian Government, has proposed guidelines titled “Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India”1 to streamline the legal and regulatory framework covering this fast-growing OFSP sector. Amongst its purposes, the guidelines aim to create a national level safe harbor for online fantasy sports and to distinguish them from online gaming (including online betting and gambling), which is heavily regulated at the State level and even banned in some States in India.
These Draft Guidelines are currently in the discussion stage, but they do outline the Indian Government’s intention to create a uniform national level policy for OFSP sector so that users across India may actively and equally engage in online fantasy sports without regard to their location. The guidelines also hope to give effect to various Court judgements that have held online fantasy sports to be a legitimate business model protected under Article 19 of the Indian Constitution.
Key Points of the Guidelines:
- Formal recognition of OFSP as an Industry;
- Constitution of a recognized self-regulatory body to govern the OFSP entities and oversee implementation and compliance with the guidelines;
- The body so constituted must be recognized by the government and should be a singlepurpose fantasy sports industry body having membership of OFSP operators who, in aggregate, have as their registered users at least 66% of the registered fantasy sports users in India. It must have an independent oversight board to govern its functioning of the self-regulatory authority and should establish an independent grievance mechanism to ensure ongoing transparency, consumer protection, and accountability;
- OFSP entities should primarily engage in fantasy sports formats that are predominantly skill based;
- OFSP entities wishing to offer pay to play variations of contest deviating from pure skill-based standards must obtain approval from an independent committee set up by the self-regulatory body. A minimum age of 18 years should be mandatory for participants in pay to play contests;
- OFSP entities should refrain from offering or advertising online gambling or games of chance on their platforms to prevent any potential misuse of the platform and should comply with the Advertising Standards Council of India guidelines with respect to their own advertising;
- States may consider granting immunity from criminal prosecutions or sanctions to OFSP entities for fantasy sports contests that are in compliance with the guidelines.
The proposed safe harbor provisions, if implemented would give much-needed relief to OFSP entities and provide them with a uniform playing field. They would also provide a legal framework for operations across India without depending on State policies. The move would certainly provide economic certainty to the sector. However, there is need for greater debate on the scope and manner of the proposed self-regulation so that the proposed self-regulatory body functions independently of dominant players and is able to faithfully implement the guidelines. In this respect, policy makers may need to re-think the formula for the body’s constitution and membership to ensure there is effective self-regulation.