Online Fantasy Sports - adding value to the indian sports ecosystem - IndiaTech

IndiaTech.Org (TSIA), a non-profit organization focused on building the world’s largest internet commerce ecosystem, today said in the report - ‘Online Fantasy Sports: Adding Value to the Indian Sporting Ecosystem’. The paper brings to light the playing pattern of OFS users, the current regulatory landscape, misplaced perceptions plaguing the industry and the positive impact of the industry on Indian sports and the overall economy.

The whitepaper states that 80% of the online fantasy sports (OFS) users prefer participating in the ‘free-to-play’ format and 98% of the 20% who ‘pay-to-play’, have either won or lost less than INR 10,000 net in their lifetime (past 3 to 4 years). This reinforces the fact that fantasy sports are a competitive digital sports engagement platform and clearly not in the nature of addiction. The average ticket size of the participation in the pay-to-play format is usually as low as INR 35/- (typically the cost of a snack). It is explicit that Fantasy sports are unlike all forms of online games that do not need a real-life player to be actually playing a real sports match to decide the outcome for the participant. The very fact that it is dependent on actualities, seasonality and availability of real-time sports matches makes it a non-addictive form of play which sets it distinctly apart from online games that are commonly perceived to be in the nature of gambling and/or betting.

The format of fantasy sports ensures that sports enthusiasts follow the game more keenly and this directly results in increased focus and attention towards sports. This contributes to an increased viewership & higher sports fan engagement that naturally contributes to more qualitative investments, up-gradation and packaging of these sports making them more viable and remunerative to the players of that sport.

Commenting on the need to safeguard the interest of sports enthusiasts in India, Rameesh Kailasam, CEO, IndiaTech said, “In the last few years, fantasy sports has certainly become a potential sector that has performed exceptionally well and boosted the consumption of sports in India. As a legally approved format of sports fan engagement, the industry is self-regulating to protect the users and operators through FIFS. There are multiple perception issues the industry has to overcome to reach its full potential as a non-addictive and skill-based platform.”

Fantasy Sports as a sector is represented by Federation of Indian Fantasy Sports (FIFS), a self-regulatory body incepted in 2017. FIFS has a defined Charter which outlines a framework within which the industry must function. Self-regulation has so far proven adequate for the industry and the focus shall be towards ensuring that the effectiveness of self-regulation continues with government recognition, as more players add to the ecosystem.

Key findings of the report:

80% of the active users are playing Online Fantasy Sports for free

20% engage in a pay-to-play format and the average ticket sizes are as low as INR 35/- which is the typical cost of a snack

98% of these 20% users who participated in the pay-to-play format of fantasy sports have either won or lost less than INR 10,000 net in their lifetime (past 3 to 4 years)

It is explicit that fantasy sports are not like any other form of online gaming. The very fact that it is dependent on actualities, seasonality and availability of real-time sports matches makes it a non-addictive form of play which sets it distinctly apart from other forms of gaming that are perceived to be in the nature of gambling and/or betting.

The most active set of fantasy sports users lie in the age group of 25 to 40 years of age who treat fantasy sports as a means of online entertainment

OFS is a game of skill where a player needs to constantly learn, practice and refine skills to be able to perform in a contest

The income tax outlay due to direct employment by Online Fantasy Platforms and operators in FY 2019 amounted to INR 43 cr, which doubled to INR 81 cr by FY 2020

Fantasy sports as an industry has attracted significant amounts of FDI in India. In 2018 and 2019, the industry attracted FDI of INR 1,500 cr (approx.) and has been growing exponentially

"India has a huge potential for Online fantasy sports. The current legally compliant format of fantasy sports ensures that sports enthusiasts follow the game more keenly, indirectly resulting in increased viewership & higher audience participation that naturally contributes to more qualitative investments, upgradation and packaging of these sports making them more viable and remunerative to the players of that sport. Sports enthusiasts now are more hooked onto sports-beyond cricket, like football, kabaddi, hockey, volleyball, basketball, baseball etc."says, Rameesh Kailasam.

Ramesh further added, as "most of the people engaging on an Online Fantasy Sports platform are looking for entertainment rather than monetising their fantasy sports experiences. A small chunk of the participants that are paying-to-play are not putting huge sums of money into a contest. The ticket size is oftentimes as low as INR 35/- which is basically what a snack costs. This aspect of fantasy sports is critical to understand to be able to establish the distinction between online fantasy sports and other forms of games that involve monetary considerations." Ramesh concludes.