This year’s Indian Premier League sponsorship cements fantasy sports’ fairytale rise
From DLF, a real estate company, in 2008, to a mobile manufacturer, VIVO, during 2016 to 2019, the sponsorships have swayed with the winds of change.
In August this year, when VIVO pulled out of the IPL sponsorship deal, it was not surprising that Dream11, a fantasy sports platform, took its place, further confirming the hypothesis.
According to a report by the Federation of Indian Fantasy Sports (FIFS) and KPMG, there has been an exponential growth in the user base of fantasy sports platforms — from a modest 20 lakh users in June 2016, it touched 90 million in December 2019 and is expected to cross 100 million by the end of 2020. As a result, the gross revenue of online fantasy sports operators surged from Rs 920 crore in FY19 to Rs 2,400 crore in FY20.
Fantasy sports are entirely different from all forms of online games that are in the nature of e-sports, casual gaming etc.
The Indian online gaming industry, the report said, is already worth Rs 4,380 crore, and by FY23, it is expected to reach Rs 11,880 crore with a compound annual growth rate (CAGR) of 22.1%. The Indian fantasy sports industry, however, is growing at a higher CAGR of 32% and its worth is expected to hit $3.7 billion by the 2024 year-end.
This kind of growth is driven mainly by overwhelming penetration of smartphones and cheap internet data.
“There is steep growth in users’ ability because of cheap internet and cheap smartphones. That has helped digital platforms of all kinds,” said Saroj Panigrahi, VP of Games24x7, an online gaming operator that branched into fantasy sports last year with the launch of My11Circle.
“Till now, the cricket league or series sponsors were mobile manufacturers, car or tyre makers. This is the first time that a sponsor has come on board that has everything to do with cricket,” Panigrahi said.
The growth of fantasy sports has also attracted criticism for allegedly promoting ‘online betting and gambling’ and PILs have been filed to challenge the legality of these platforms. However, courts have rejected such claims and accepted the legality of the online fantasy sports business, calling it a game of skill and not chance.
“Because there is fantasy sports, people are taking interest in knowing about the players; because people are taking interest, there is live broadcast of these matches; because matches are being aired and people are watching, advertisers are also putting in money there.”
Many still believe that a regulatory framework is required to safeguard users from exploitation. The courts’ judgements are based on the interpretation of the 1867 Indian Gambling Act which itself is archaic.
The betting or gambling angle comes in when a user pays money to register a team for a contest with other users, but the promoters believe it is “by and large an entertainment-driven engagement” between the users and the platforms.
A whitepaper by Indiatech on ‘Online Fantasy Sports: Adding Value to the Indian Sporting Ecosystem’ said 80% of the participants play online fantasy sports for free as entertainment. Only 20% engage in the pay-to-play format, of which 98% have either won or lost less than 10,000 net on online fantasy platforms in the past 3-4 years.
The average ticket size of the participation in the pay-to-play format is usually as low as 35.
This engagement is also translating into higher participation in real sports. In a survey conducted by Kantar on 1,434 fantasy sports participants, 60% claimed to watch or follow sports more than before; 59% admitted to have started watching new types of sports; and 48% said they watched every game irrespective of the team or the country, because of their interest in fantasy sports.