‘Niti Aayog’s guidelines for fantasy sports to address legal ambiguity, malpractices of offshore firms’

January 13, 2021 12:19 PM

The ever-evolving digital infrastructure, smartphone penetration, low cost of data, and high-speed internet catalysed the rapid growth of the Online Fantasy Sports Platforms.

The fantasy sports industry currently employs 3,000-3,400 people directly and supports. (Representational image: Reuters)
  • By Navkiran Singh

With the advent of Online Fantasy Sports Platforms (OFSPs), sports fans all across the world found a new avenue to take their fandom to newer heights. More than just a medium of enjoying their favourite live sports, fans got a platform to show their skills, which were otherwise limited to just conversations. They could back their claim of being an expert with actual facts, and it was only a matter of time before Fantasy Sports became a phenomenon.

Let’s have a look at how the industry has grown over the years

Going by FIFS’ report, there’s no denying that sports fans have welcomed the innovation of fantasy sports. Along with the growth of the userbase from 2 Million in 2016 to 90 Million in 2019, the competition in the space has also increased manifold. From less than 10 operators in 2016 to over 140 at the end of 2019, the market is getting crammed with each passing day.

It all started almost two decades ago with ESPN-Star Sports launching its ‘Super Selector Fantasy Game’ in the year 2001. The format allowed the users to have their own team and register it for free for a month or the duration of a specific series. Over the years, several other popular tournaments like the UEFA Champions League, English Premier League, ICC Events, and now IPL have started developing games through which people could have the experience of managing their own teams.

The rise of Digital paved way for the success of the industry

The ever-evolving digital infrastructure, smartphone penetration, low cost of data, and high-speed internet catalysed the rapid growth of the OFS industry. KPMG India in its report noted that the industry has grown at a CAGR of 212 per cent and that it could attract the FDI of more than Rs 10,000 Crore in the next few years while generating 1.5 Billion transactions by 2023.

What the future holds?

The fantasy sports industry currently employs 3,000-3,400 people directly and supports 100-200 ancillary companies dealing in research, analytics, coaching, and tutoring fantasy sports fans, indirectly. It further has the potential to generate over 5,000 direct and 7,000 indirect jobs in the coming 2-3 years. The same report by PwC India also noted that the OFSP industry has generated a revenue of over Rs 250 Crore for the advertising industry and estimates the growth to Rs 2,000 Crore within the next few years.

According to Labourfile.org — Fantasy sports that are based on the skill of participants to determine the outcome, are exempted from the definition of a bet or wager since they do not relay on chance or luck to win, unlike online bingo and online casinos. Fantasy Sports are classified as ‘Games of Skill’, where skill dominates over chance, with the result dependent upon the “relative knowledge, training, attention, experience, and/or adroitness of the participants”. This means that ‘games of skill’ like fantasy games do not fall under the regulations prohibiting gambling under Indian law, though some state laws may differ.

At such a time of exponential growth of the OFS and the Indian online gaming industry as a whole, adverse regulatory developments like the banning of fantasy sports and online real money gaming, which are essentially skill-based games, could slow down the growth trajectory. With rising global investor interest in this still fledgling industry, state governments should look at collaborating with relevant bodies and develop a regulatory regime with the goal of protecting the consumers’ interest.

The guidelines proposed by NITI Aayog for uniform national-level regulation of Indian OFSPs is the way to go. It will not only implement a single national policy but will also provide further clarity to the platforms, users, and regulators, thus supporting the responsible growth of the industry and streamlining the ecosystem. It will dissolve the legal ambiguity around the sector and harmonize the way in which different states treat this skill-based game. Furthermore, it will fill the gaps caused by the absence of regulations pertaining to the OFSPs specifically and curb the malpractices of offshore companies, which often take a toll on other law-abiding platforms. I believe not just OFS, due attention should also be given to other skill-based platforms in the RMG sector like online Poker and Rummy, which also have an immense potential to grow.

As a responsible operator, we have always understood our onus. We have never missed out on an opportunity to take measures towards establishing responsible gaming and fair-play policies and practices and will continue to do so, regardless of the fate of the proposal.

Navkiran Singh is Founder & CEO of Baazi Games (parent group of BalleBaazi.com). Views expressed are the author’s own.

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