Fantasy sports seem to have evolved into a multi-billion dollar industry, thanks to technological advancement and changing consumer demands. The growth of this industry can be assessed from the fact that the fantasy sports market in India was reported to be Rs 6800 crore in FY22, as per Statista. It is also forecasted to grow to Rs 25300 crore in FY27.
The free-to-play revolution
Several platforms democratised fantasy sports by eliminating entry fees for contests. These contests, often termed practice contests are free to play and believed to generate user’s interest and confidence to opt for pay-to-play contests. Approximately 80% of active users play online games for free, as per a report published by IndiaTech in 2020. It was also mentioned in the report that, of the remaining 20% of users who play pay-to-play format, the entry fees are as low as Rs 35, and they either won or lost less than Rs 10 thousand on an online fantasy sports platform.
Creating interest in sports
Fantasy sports are believed to be a catalyst to create and grow user’s interest in several sports. Platforms like DREAM11 and A23 among others have introduced multiple contests on several sports on their platforms. As per the FIFS-KPMG report, 30% of users have been playing more than one sport on these platforms.
Data-driven decision making
Nowadays, with advent of newer technologies, data is believed to be available for almost every digital natives. This phenomenon seems to have transformed the fantasy sports from a game of chance to a strategy-based competition. Platforms are considered to empower players to make informed decisions by providing them with predictive analysis.
Road ahead
Even though the fantasy sports industry has been booming, it also has a few challenges like maintaining user engagement, combating fraud, and complying with regulations. In October 2023 the 50th Goods and Service Tax (GST) Council levied 28% GST on the whole deposit value. The impact was felt in many ways which includes a steep decline in investments and a reduction in revenue and margins of fantasy gaming companies among others. Under the new tax regime, users are expected to pay 28% GST while making a deposit on their wallet. For instance, if a gamer deposits Rs 1,000, in her wallet then the tax paid by the user should be Rs 280 and she should be left with Rs 720 in the wallet. However, some platforms currently absorb GST amounts, so that there is no impact on playing behaviour.