The Fantasy Sports Gaming Landscape in India
Fantasy sports are no longer an alien concept in India. With the introduction of gaming websites, fantasy gaming has taken a front seat. Fantasy sport is a growing industry in India. Based on the FIFS-KPMG report, there are currently about 20 million fantasy gamers in India, and the number is expected to increase to about 100 million by the end of 2020.
The online gaming sector in India is rapidly growing. Introduction of newer and more sophisticated technology and many market variables are the reason behind this exponential growth.
The value of the fantasy market in India is also expected to exceed $5 billion in the next two years. After discovering its immense potential, a lot of start-ups and entrepreneurs are looking to invest in the industry.
The gaming industry in India has found various ways to encourage fan engagement in various sports across India. The industry already has an estimated worth of INR 43.8 billion and is said to get to INR 118.8 billion, with a growth rate of 22.1%.
Understanding fantasy sports
A fantasy sport is a game that requires users to create their fantasy teams according to some criteria from a list of real sports players scheduled to play a live sport. Users are required to pay an entry fee to enter a contest.
After the deduction of the service fee, the entry fees are pooled for distribution among the users on the platform depending on how they performed. Users customize personal teams according to their understanding of the game, attention, and experience.
The user gets points according to the performance of the real sport players chosen by the user to draft his/her team. Points are given to users based to the scoring sheet and performance of their chosen players in the real match. Users are later ranked based on the points gained and get distributions from the Entry Pool accordingly.
Studies in India Regarding Fantasy Sports
The Indian Federation of Sports Gaming (IFSG), which is the first self-regulatory industry body in India for the sports gaming sector and KPMG India Private Limited (KPMG) conducted a study on the ‘The Evolving Landscape of Sports Gaming in India’ at the second flagship event (GamePlan 2019) with the theme ‘Economy of Sports Gaming’.
The study gives an overview of the online gaming industry, focusing on fantasy sports; it aims to measure its impact on the consumption of actual sports. The study covers 1169 participants from cities like - Mumbai, Delhi, Kolkata, Bangalore, Ahmedabad, Pune, Chennai, and Hyderabad.
Among the people studied, 566 were fantasy sports players and 603 were non-fantasy Sports players. The study revealed that 37% of fantasy sports players consume more than 6-8 hours of real-life sports content every week to remain up-to-date with knowledge of players and match conditions. This has made them active participants of a match.
This is the first study that tries to understand the relationship between playing fantasy sports and consumption of real-life/actual sports. Due to the convergence of sports and technology, the Indian sports fans are enjoying a more immersive and engaging viewing experience. With the rise of smartphones and high-speed internet access, this is a great time to be a sports fan in India.
Biggest fantasy gaming industries in India
Dream11 is one of the biggest fantasy gaming industries in India. It currently occupies 90% of the domestic fantasy sports market, according to a joint report by the Indian Federation of Sports Gaming (IFSG) and KPMG.
Sector experts believe its success will inspire more entrepreneurs to see fantasy gaming as a scalable business proposition. This will offer monetary opportunities going ahead, even though paid players are just about 15% of Dream11’s overall user base of 51 million.
It was developed and conceptualized by Dream11 Inc, the app supported by Android, iOS and web is used to play an online game. It makes it possible for users to create their fantasy team playing a specific tournament. The users create their team and earn points based on the performance of the chosen player in the actual match. Points are calculated after the game and the performance of users are compared with that of other players in the league.
Current legal scenario
According to the law in India, fantasy sports are permitted all over the country, except in some states such as Assam, Odisha, and Telangana. There is no legal definition for "fantasy sports" in India. The legality is subjected to whether the game qualifies as a 'game of chance' or a 'game of skill'.
Games of chance are categorized under gambling and are thus restricted by state gambling laws. But games involving considerable and substantial degree of skill (more than 50%) are categorized outside the extent of betting laws and consequently are legal in India. Courts have examined the game format of fantasy sports companies and have considered its format as ‘game of skill’.
Courts have not examined any other fantasy gaming formats and have not offered any views, judgments, or analyses of the format of any other fantasy gaming platform. Whether a fantasy sport is a game of chance or skill, legality is according to the modalities of every game.
Since there are no set of government regulations, the standards of fantasy sports industries in India are regulated by the Federation of Indian Fantasy Sports (FIFS). Self-regulation rules for the Indian fantasy sports industry are set-up by the federation until the government comes out with any standards and regulations.
Based on the Indian rule, 18% GST is applicable on games that are skill-based, such as the format in fantasy sports gaming. The court referred to Schedule III of the Central Goods and Services Act, 2017 which states that ‘actionable claims, other than lottery, gambling and betting’ are excluded from the scope of supply.”
Are there laws separating gambling and fantasy sports?
Yes, there is the Central Government Act (The Public Gambling Act, 1867) that is made up of 18 Sections. Section 12 (Act not to apply to certain games) clearly states that “Nothing in the provisions of this Act contained shall be held to apply to any game of mere skill wherever played.” That means fantasy sports that are part of skill-based games are not included.
Are there different gaming laws across states?
Under the Indian constitution, the state legislatures have been given the power to frame state-specific laws on ‘betting and gambling’. The public gambling act of 1867 has been adopted by some states. The other states in India have created their own legislation to regulate gaming activities within its territory.