IPL 2021: FIR against Dream11 founders, IPL sponsor halts operations in Karnataka

The Indian Premier League (IPL 2021) season 14 is reaching its business end with only 3 matches left for completion of the season. But the biggest sponsor of IPL 2021 Dream11 is in trouble. According to available information, Bengaluru Police has filed FIR against the founders of Dream11 Harsh Jain and Bhavit Sheth on a complaint.

Post the FIR, the Mumbai-headquartered company has stalled their operations in Karnataka. According to the reports emanating from Bengaluru, company was in violation of the southern state’s gaming ban that came into effect on October 5.

After the law came into fact, the other gaming companies such as Mobile Premier League, Paytm First Games, Games24X7 and others deactivated their platforms in Karnataka but Dream11 continued with theirs and that has led to Bengaluru Police’s FIR against the founders of most flourishing gaming company of India.

It is worth noting that companies like MPL, Rummy Circle have already stopped operating in the state. Dream11 which counts Falcon Edge and Tiger Global among its backers has followed the suit but before that FIR was already fired against the company founders on the complaint of one resident of Bengaluru.

“In order to allay our users’ concerns, we have decided to suspend operations in Karnataka. This decision is without prejudice to our rights and contentions under law,” the Dream11 spokesperson said. “The Karnataka Police Act recently amended its gaming law to prohibit online gambling, betting and wagering.”

“We have been advised by the Federation of Indian Fantasy Sports, who have shared an opinion from a former Supreme Court judge, stating that the Act does not apply to its member fantasy sports operators.”

The gaming company now shows a message on their website that users that reside in Karnataka or hold bank accounts within the state cannot participate in cash contests on the platform. When contacted, a Dream11 spokesperson said it ceased operations due to its Karnataka users expressing deep concerns and anxiety.

Why Dream11 has to halt the operations in Karnataka, what is the complaint all about?

A resident of Bengaluru, Manjunath has filed a complaint after he learned about “many” players who lost money in “expectation of winning.”

Manjunatha alleged in his statement, that the game is “surprisingly” opaque as to who “grabs the money” when the player loses. “Players do not have control over the activities. So, it is a clear case of running online games of wagering and skill risking the money of the players,”

Dream11 recorded a profit of Rs 180 crore in the financial year 2020, making it one of the few Indian consumer-tech unicorns to have turned profitable.

It had recorded a loss of Rs 87 crore in FY19.

Dream11, which is run by Sporta Technologies aka Dream Sports, also saw its revenue increase by over 2.5 times to Rs 2,070.4 crore in FY20 from Rs 775.5 crore in FY19, according to the latest regulatory documents sourced from business intelligence platform Toffler