Gaming Report: Delhi High Court Rejects NFT Legal Plea, Government Clarifies Wagering Rules & PokerStars Parent Company Issues Final Notice

Gaming Report - Delhi High Court, N Venkataraman and Flutter
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  • Namita Ghosh April 28, 2023
  • 4 Minutes Read

In today’s gaming industry news, we cover a unique legal battle over non-fungible token (NFT) technology, government clarification on wagering rules, and a final notice issued by the parent company of PokerStars.

In a rare legal case fought over the use of non-fungible token (NFT) technology, the Delhi High Court, on April 26, rejected the Dream11-backed NFT platform Rario’s plea to seek exclusive rights over the technology.

Addressing the ongoing discussion around games of skill and games of chance, Additional Solicitor General N Venkataraman stated that separating them in the context of wagering was a mistake. Speaking to PTI, Venkataraman emphasized that the Union government’s newly notified rules are clear and unambiguous.

In other news, Flutter Entertainment PLC, the parent company of PokerStars, has issued a final notice to the remaining shareholders of The Stars Group. They have until May 4, 2023, to convert their TSG shares to Flutter shares.

 

Delhi High Court Rejects Dream11-backed Rario’s Interim Plea Against MPL’s Striker From Using Public Information of Cricket Players

In its ruling on April 26, the Delhi High Court, led by Justice Amit Bansal, rejected a plea by Dream11-backed non-fungible token (NFT) platform Rario, which sought exclusive rights to NFT technology for its cricket collectibles. Rario also aimed to prevent MPL’s Striker from utilizing public information on cricket players.

Delhi High Court

Rario and Striker both offer NFTs in the form of player cards, which users can collect as digital assets. However, Justice Bansal ruled that no party can claim exclusive rights to NFT technology, as it is freely available and used for enhancing in-game experiences.

Justice Bansal, in his order, said: “The plaintiffs cannot claim to have an exclusive right over the use of an NFT technology. NFT is a technology that is freely available. NFT Player Cards are, in fact, ‘in-game’ assets to be used for enhancing the experience of playing the game.”

Emphasizing that Dream11 and Striker cannot claim exclusive rights over the NFT technology, he added, “There is no difference between online fantasy sports (OFS) with NFT Enabled player cards and ordinary OFS Game in so far as the use of the name or artistic impression/ photograph of a player is concerned.”

Rario had filed the writ petition in February, backed by several cricketers like Harshal Patel, Umran Malik, and Shivam Dube, players who have signed deals with the company. While Rario has partnerships with international cricket organizations such as Cricket Australia and Cricket New Zealand, it has no business relationship with BCCI, IPL, or WPL.

Striker, backed by the All India Gaming Federation and WinZO, works with independent artists to create original cricket-themed art for its fantasy league operations.

Commenting on the judgments, AIGF CEO Roland Landers said, “This is a victory for thousands of indie game developers who are working tirelessly for building a vibrant Indian gaming industry and achieving our Hon’ble Prime Minister’s dream of a $1 trillion digital economy.”

He added that Rario’s petition directly impacted innovation in the online gaming industry, especially in fantasy sports, NFT/ Web3, and blockchain areas.

Roland Landers
Roland Landers

 

Co-founder of Striker, Nitesh Jain, said, “We are tremendously grateful to the Delhi High Court for establishing that there can be no monopoly over NFT technology. Indie game developers like Striker can’t survive in a world where NFT tech is monopolized by a few. But, just like you can’t tell photographers to stop using color pictures available in public, you cannot ask developers and artists not to make NFTs out of publicly available images or information.”

 

Additional Solicitor General N Venkataraman: States Shouldn’t Distinguish Between Games of Skill & Chance

Additional Solicitor General of India, N Venkataraman, recently advised states against differentiating between games of skill and chance. In a statement to PTI, he stated that any state government attempting to do so would be making a mistake.

He emphasized the clarity of the new e-gaming policy announced by the Ministry of Electronics and Information Technology (MeitY) in January 2023 and the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021, notified on April 6, 2023. These rules clearly define wagering as placing money on uncertain events and prohibit any online games with winners based on unknown outcomes.

N Venkataraman
N Venkataraman

 

He said, “The new rules notified by the Centre are very clear. There is no ambiguity. Our courts have held that wagering is illegal, and any business predicated on wagering is res extra commercium that is a thing outside commerce. Such businesses cannot be carried on in India.”

The new online gaming rules also involve appointing self-regulatory organizations to identify operators violating the rules.

Talking about games involving stakes, Ventakaraman questioned, “How do you know this ball is going to be six or four? Whether a player will be in the playing squad or not? Whether the chosen player would perform or not? How do you know you will win the game before the game is even played? Stakes are today placed on these uncertainties, hoping in anxiety that the predictions turn true to reap higher rewards than the amount at stake.”

Discussing games with stakes, Venkataraman questioned the ability to predict outcomes such as specific plays or player performance, emphasizing that stakes are placed on these uncertainties. He also mentioned the Supreme Court’s ruling that horse racing is a game of skill, despite its unpredictable outcome, and how it leads to betting.

Venkataraman accused industry stakeholders of creating confusion with their arguments about games of skill and chance. He used Teen Patti and Cricket as examples, stating that while Teen Patti is a game of chance and Cricket involves skill, the results in both remain unknown. Betting on these games constitutes wagering.

The Additional Solicitor General also highlighted the issue of money laundering by offshore betting sites.

 

Flutter Entertainment Issues Final Notice For The Stars Group Share Conversion

Flutter Entertainment PLC, the parent company of PokerStars, has issued a final notice to remaining shareholders of The Stars Group (TSG), urging them to convert their TSG shares into Flutter (FLTR) shares by May 4, 2023. Any unconverted shares of TSG will become worthless after this deadline.

Flutter Entertainment PLC

Flutter Entertainment, formerly Paddy Power Betfair, agreed to merge with TSG on October 2, 2019, creating the world’s largest online gaming company valued at over £10 Billion. The combined business was projected to have annual revenues of around £3.8 Billion.

In February 2020, UK’s regulatory watchdog, the UK Competition and Markets Authority (CMA), announced its investigation into the merger to ensure a competitive environment for UK online businesses. The CMA granted unconditional phase one clearance to the merger on March 30, 2020.

The merger, completed on May 5, 2020, provided three years for TSG shareholders to convert their shares to Flutter shares, with the deadline set for May 4, 2023. As per the merger documents, each TSG share is exchangeable for 0.2253 FLTR shares. Currently trading at just under $100/share, each unconverted TSG share is worth over $22 for the next ten days.

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