Here's why BCCI can't penalize Dream11 for early termination
What's the story
The Board of Control for Cricket in India (BCCI) cannot penalize Dream11, a leading fantasy gaming platform, despite the reportedly early termination of its ₹358 crore sponsorship deal, as per Indian Express. The decision was prompted by the introduction of the Online Gaming Bill as a law in India. A clause in the contract prevents penalties if a new law disrupts a company's core business operations.
Sponsorship shift
Dream11's withdrawal and tender process
Dream11 recently informed the BCCI about its inability to continue as the team's sponsor for the Asia Cup. A BCCI official confirmed this development to Indian Express, saying, "Representatives of Dream11 visited the BCCI office and informed CEO Hemang Amin that they won't be able to continue." The report further added "won't be liable to pay anything" to BCCI due to a clause in the Rs 358 crore contract that prevented them from being penalised.
Sponsorship influence
Impact on other sponsorships
Dream11's decision will not only affect the BCCI but also its other global sponsorships. The company sponsors several IPL franchises and athletes such as MS Dhoni, Rohit Sharma, Hardik Pandya, Rishabh Pant, and Jasprit Bumrah. In 2020, it even replaced Vivo as IPL's title sponsor amid India-China tensions. However, with the new law in place, these sponsorships could be at risk in the coming months.
Regulatory impact
Online gaming bill's implications
The Online Gaming Bill cites the unchecked growth of online money gaming services as a potential threat to national security, public order, and integrity of the State. It links this growth with illegal activities such as financial fraud, money laundering, tax evasion, and even terrorism financing. This regulatory environment has forced Dream11 to rethink its business model and sponsorship commitments in India.