50% user transactions on fantasy sports platforms from Tier-II, III cities: Deloitte, FIFS report

The Federation of Indian Fantasy Sports (FIFS) has unveiled the findings of a report, titled ‘Fantasy Sports: Creating a Virtuous Cycle of Sports Development’, in collaboration with Deloitte. According to the report, India is the world’s biggest fantasy sports (FS), market with a user base of over 13 crore, which is expected to further grow at a CAGR of 32 per cent in the coming years.

The country has become a high growth, in-focus FS market due to factors like large tech-savvy millennial population, growing affiliation with sports, rapid smartphone penetration, availability of low-cost mobile data. The market size is projected to grow from Rs 34,600 crore in FY21 to an estimated Rs 1.65 lakh crore by FY25, thereby clocking in a CAGR of 38 per cent.

Cricket, the dominant sport on FS platforms, may see its share going to kabaddi, hockey, football and volleyball, which are growing in popularity, but is expected to continue growing at 30 per cent CAGR over the next four years and remain the highest contributor to the overall revenue of the FS industry.

Women’s cricket has also gained popularity with FS. The first 12 matches of the 2020 ICC Women’s Twenty20 World Cup generated over four crore viewing hours in India, a 213 per cent increase from 2018. During the Phase 1 of the 2021 edition of the Indian Premier League (IPL) alone, the FS industry user base in India grew by over 20 lakh users.

Key highlights:

• Fifty per cent of user transactions on the FS platforms have come in through Tier-II and III cities, which not only promotes digital payment literacy, but also increased engagement and involvement of population in sports through the grassroot level

• Currently, it is estimated that close to 30 per cent of the registered user base for FSPs in India is females, a number that is expected to consistently rise in the next few years

• Globally, the FS user base has been male dominated. Men account for 67 per cent of the total revenue. Further, the male FS user segment is expected to grow at a CAGR of 14 per cent over 2020-26

• The generation of Rs 5,200 crore revenue in FY21 would have created an indirect revenue of approximately Rs 5,500 crore through its vendors and service providers. The total revenue attributable to FS (direct + indirect) is, therefore, Rs 10,700 crore. It may also be noted that the indirect revenue will generate its own stream of GST as well.

FS drives a sporting culture

"Fantasy sports industry is making huge economic inroads into India's overall growth and development in multiple ways - creating highly skilled jobs, attracting foreign direct investment (FDI) and generating significant revenue for the exchequer. Besides, it is also propelling sporting culture and giving a boost to non-cricket sports, as people tend to hone knowledge to participate in fantasy sports contests," said FIFS chief executive officer Anwar Shirpurwala.

"Taking cognisance of the potential of this sector, together with multiple favourable court judgements, primary government think tank NITI Aayog has released comprehensive guidelines for FS. Recent positive developments, like Rajasthan's announcement to regulate games of skill, Karnataka HC decision quashing law banning games of skill, Union Budget 2022 announcement to set up an AVGC (Animation Visual Effects Gaming Comic) Taskforce and Prime Minister Narendra Modi's statement on India's potential to become a global hub of gaming sector, have together laid down a clear roadmap for growth of this industry."

"In another progressive move for the sports tech ecosystem, Gujarat, in the blueprint of its sports policy recently, announced an incubator for sports startups and an athlete welfare programme. This will further bolster the growth of sports industry, which has been sidelined from serious bureaucratic conversations till now."

Shirpurwala also said that FIFS, as the only self-regulatory industry body for this niche sector, is fully committed to work with the government, both at the Centre and in states, to ensure growth of this industry and protect its users.

Sharing his thoughts about the sector, Prashanth Rao, partner, Deloitte India, added, “Online FS has, over the past few years, witnessed unparalleled growth and widespread acceptance among Indian sports fans. By leveraging cutting edge technology, developed locally, this sunshine sector is now emblematic of the Indian ‘Atma Nirbhar’ vision of self-reliance and growth. I believe that FIFS can help the sector unlock its true potential by encouraging responsible rule-based gaming and contributing to the development of the sporting industry in India.”

NITI Aayog has recognised FS as a sunrise sector for India’s digital economy and has recommended a uniform national-level regulatory framework for the industry. Given widely available research into predominance of skill in FS, and landmark decisions from the Supreme Court and multiple High Courts on FS format, there is merit to put in place a robust, unified national-level regulatory framework, bringing an end to the ambiguity and multiplicity of regimes.

Such a framework, with checks and balances, will usher in greater accountability and transparency, improve the ease of doing business, while also ensuring protection of user’s interest.

You can read the full report below:

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