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The curious case of Dream11 suspending operations in Karnataka

Dream11 had mentioned at the time of suspension that Karnataka residents will not be allowed to participate in pay-to-play contests on the platform.

October 25, 2021 / 09:53 AM IST

On October 10, fantasy sports major Dream11 had announced that it was suspending operations in Karnataka, in order to comply with the state's online gambling law that came into effect on October 5.

This move came after similar suspensions by several real-money gaming firms including Adda52, Mobile Premier League (MPL), Games24x7 (RummyCircle, My11Circle), Junglee Games (Junglee Rummy, Junglee Teen Patti, Howzat), and A23 (Ace2Three) in the state.

What's interesting however is how Dream11 is approaching this suspension. While almost all the firms have geoblocked the state, Dream11 seems to have stopped allowing only those users who have a bank account within the state, from entering paid contests on the platform, Moneycontrol has learnt.

This essentially means that users from other states who have attached an outstation bank account to their Dream11 account, but are currently located in Karnataka, are still able to enter paid contests on its platform. Moneycontrol was able to enter into one such contest at the time of writing this article.

Users have an option to change their state of residence until they verify their profile with their bank or PAN details, subsequently which they are updated as per the submitted details and one cannot make any further changes. Dream11 said it is unable to comment on the story since the matter is sub judice.

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To be sure, the Tiger Global-backed firm had mentioned at the time of suspension that Karnataka residents will not be allowed to participate in pay-to-play contests on the platform, while an error message had stated that users who currently reside or have a bank account within the state cannot participate in cash contests on Dream11.

It had said the law does not apply to members of Federation of Indian Fantasy Sports (FIFS), a self-regulatory industry body for fantasy sports, since the format "has been upheld by the hon’ble Courts of India as not amounting to gambling, betting or wagering". However, this decision was made to allay "deep concerns and anxiety" from its users in the state and "is without prejudice to our rights and contentions under law".

That said, the suspension came on the heels of the Karnataka Police filing an FIR against Dream11 cofounders Harsh Jain and Bhavit Sheth for continuing operations on its platform, the first such case under the new law.

The Karnataka High Court on October 22 told the Advocate General appearing on behalf of the state government not to make arrests under the new law, which is currently facing a legal challenge from six petitioners including skill gaming industry body All India Gaming Federation and real-money gaming firms like MPL, Games24x7, A23(Ace2Three), Junglee Games and Gameskraft.

Earlier this month, Delta Corp group CFO Hardik Dhebar had said during the company's earnings conference call that they had geoblocked the state at present. The casino and hospitality firm currently operates an online poker site Adda52, rummy platform Adda52Rummy and a multi-game destination called Adda Games that offers fantasy sports and card games through its subsidiary Gaussian Networks.

Junglee Games, which operates Junglee Rummy, Junglee Teen Patti, and fantasy gaming platform Howzat, also notes on its website that people residing or located in Karnataka are prohibited from playing cash rummy tournaments on its platform. Online betting giant Flutter Entertainment, which was created by the merger of Irish bookmaker Paddy Power and gambling firm Betfair, had acquired a majority 50.1% stake in Junglee Games in March this year.

Platforms like MPL and Games24x7-owned My11Circle have also placed similar geoblocking restrictions on users within the state.

This development also came at a crucial time for gaming firms who were looking to cash in on the pandemic-driven usage boom and high interest from fans during key tournaments like the ongoing ICC T20 World Cup and the recently concluded Indian Premier League tournament.

(The story has been updated with Dream11's response)
Vikas SN
first published: Oct 24, 2021 03:45 pm

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