What online fantasy gaming needs to revolutionize the sports industry in India

According to Niti Aayog’s estimates, with the right policies in place, fantasy sports have the potential to generate FDI of over 10,000 crore in the years to come.

By Devanshu Jain

The Covid-19 pandemic may have crippled some industries, but it has also catapulted and breathed new life into some others, especially in the digital ecosystem. The online gaming market – which is expected to generate global revenues of $ 300 billion by 2026, up from $ 62 billion in 2020 – has truly come of age in India during the pandemic. The industry has spurred a whole universe of ecosystem players, and the brightest star has been fantasy sports. The market has grown tremendously – in 2020 alone, 100 million users in India joined various fantastic gaming platforms, and they currently engage 14% of all smartphone users in the country. Their revenue tripled in one year to reach $ 340.5 million in 2020. Needless to say, fantasy games have taken off in the past couple of years.

But politics often lag behind when it comes to tech-driven innovation, and fantasy games are no exception. Its exponential rise in popularity, especially amid a pandemic that has demanded every iota of resources available to fight, has meant it hasn’t received the kind of political and regulatory attention it deserves. Here is the main obstacle: All online games that involve real money, including fantasy sports, are governed by 19th century gambling legislation that could not have explained the dynamic avatars of today’s players. real money games. This, coupled with the fact that states are free to regulate (or completely ban) gambling and betting activities, means that fantasy sports are unable to escape a regulatory vacuum that severely restricts their potential. There is a whole series of economic and cultural benefits that we can unlock if this segment is placed under new and improved uniform legislation that governs its practice.

Fortunately, policymakers are sitting down and taking note. In December 2020, Niti Aayog released draft guidelines for the regulation of fantasy sports – signaling the lack of uniform rules as the biggest obstacle to innovation in an industry teeming with lucrative opportunities. Among other things, they recommended formal and legal recognition of the fantasy sports industry and a light self-regulatory body to oversee pan-Indian operations.

If such legislation were to be enacted, India’s sports ecosystem – both online and offline – would witness a revolution. Even with regulatory hurdles and gray areas, the industry has spurred a multitude of unicorns in a relatively short time, with cumulative valuations of $ 7 billion – imagine the boost given to Indian sport if the political environment really should encourage innovation and investment in the field. .

The emphasis on fantastic sports is not without reason – they are, in fact, distinctly unique in the online gaming world, as conquering them requires skill and knowledge. The Public Gambling Act, 1867, which currently governs them, even makes an exception for skill-based activities, and several legal decisions in the recent past have classified fantasy sports as such. Since the results depend on the actual games and the performance of the players, they prompt deeper engagement and analysis of the sport in question, directly resulting in not only higher revenues, but also the acquisition of new customers. Even then, they are largely integrated into the field of gambling – a few states banning them outright – and political push in both regulation and public communication is needed to change this perception.

The case for fantastic sports is not just the economic incentives at hand – regulation of the sector could propel foreign investment, innovation and employment in India’s sports industry. Niti Aayog’s discussion paper cites the example of regulation in the United States that has helped it become the largest market for fantasy sports in the world. Faced with many of the same hurdles India now faces, several ecosystem players have come together to form a participatory and representative industry body called the Fantasy Sports and Gaming Association. The FSGA now operates as a nationally uniform organization for the entire ecosystem in the United States, engaging with businesses large and small, helping to foster and expand the market, supporting legal formats of fantastic games and ensuring the protection and legal participation of consumers.

Although this infrastructure is not available in India, our user base of fantastic sports has already surpassed that of the United States. According to Niti Aayog’s estimates, with the right policies in place, fantasy sports have the potential to generate FDI of over 10,000 crore in the coming years, generate 1.5 billion transactions by 2023 and create more than 5,000 direct jobs and more than 7,000 indirect jobs in the next two years.

In addition, side effects on niche sports, such as volleyball and kabbadi, are likely to be significant. With greater consumer interest in various sporting events, revenue from fantastic games could not only boost investment in these niche sports, but also help make them more popular and integrated with the mainstream – a clear win-win. for our athletes, spectators and the sports industry in general.

We don’t need to look any further than our local Dream11 to demonstrate this domino effect. What started as a fantastic gaming platform (now with over 11 crore users) has grown into Dream Sports Group, a full-service, end-to-end sports giant enabling infrastructure and services across multiple sports. and revolutionizing the way they are consumed in India. Their activities encompass a whole range of sports services, including an accelerator for sports businesses, a payment gateway, a venture capital arm, an organized tours and experiences vertical and a non-profit foundation. It is clear that with the right political environment and the right investments, an innovative fantasy gaming ecosystem has the potential to change the face of Indian sport as we know it.

Niti Aayog’s guidance is just the beginning, and we have a long way to go to actually witness this potential materialize. They are, however, a step in the right direction – hopefully towards drafting and passing dedicated legislation that provides uniform governance and oversight for the fantasy gaming industry. The market is undeniably huge in India, and the industry needs a strong yet collaborative and self-regulatory model to be able to truly harness it to its full potential.

(The author is a policy consultant and adviser to the former Indian Minister of Informatics and Communications. Opinions are personal.)

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