The actual indicator of growth lies at the bottom line. For any firm or industry, the actual dollar they are left with at the end which is financially termed as profit is the real result of growth and so is the case with Online Fantasy Sports in India whose tax spend has increased four times from Rs 200 Cr in FY2019 toINR 750 Cr in FY2020.
The Federation of Indian Fantasy Sports (FIFS), and Fantasy Sports in collaboration with KPMG has dedicated themselves to fantasy sports study in India and reported their findings in ‘Business of Fantasy Sports’ comparing just by the basis of gross revenues in a short span of a year the field has seen a tremendous growth leading the gross revenues to be INR 2,400+ crore for the year 2020 a sharp increase from 920+ crore in 2019. Further fantasy sports have permeated across the whole sports ecosystem with no bar on the type of sports, Cricket, Basketball, Volleyball.
KPMG report findings suggest- Cricket is the most loved sports in India with 77% of users engaging in cricket contests, Football was at 47% while less popular sports like Kabaddi stayed at 9%, The report also suggested that paid users formed 15-20% of the active users which is huge for a fledging industry.
What are the factors contributing to that growth?
- A sharp rise in the number of operators from 10 in 2016 to 140 approx. in 2019 is Indicative of the potential of growth this industry holds in India that everyone Jumped to capture the opportunity from themselves and some have succeeded in the task as well.
- A plethora of suppliers is not enough to drive growth but the consumer base has also equally grown from 2 million OFS users in 2016 to 90 million in 2019.
- The economy before the COVID-19 pandemic was booming with the prospect and it also indirectly contributed to this growth. And in return, OFS has generated employment, contributed to the growth of the economy through sponsorship, CSR activities, attracted FDI, and contributed to the GDP in general.
- Dream11 was the official sponsorer of IPL2020 with an investment amounting to Rs 222 crore.Mobile Premier League and MyTeam11 also leveraged the opportunity and marketed themselves.Mobile Premier League sponsored Kolkata Knight Riders and Royal Challengers Bangalore in the IPL 2020 and Abhishek Madhavan their vice-president firmly believed that fantasy sports will see tremendous growth in the next two years.
While all this, bodes well for the industry and the parallel supporting industry but the cost of Entry Amounts on contest has also significantly increased from INR 6,000 crore in 2019 to INR 16,500 crores in 2020.
The sudden growth of OFS market has thus indirectly spearheaded the growth of service providers as well. And the most surprising element was that the consumers were not just restricted to Tier 1 cites but half of the transactions came fromTier 2 and Tier 3 cities of India, they are pervasive and inclusive thereby promoting digitalization as well.
Fantasy sports also provoke amongst its customers the need to follow real sports daily. As per a survey,55% of the sample population became more interested in real-time sports and spent actual time in analyzing and strategizing with the coaches and players which they later emulated in their fantasy games.
Commenting on the industry growth Amitabh Kant, CEO, NITI Aayog in his speech at GamePlan 2020, shared the potential this industry holds and how Digital India’ and ‘Startup India’ Government campaigns have provided a thrust in the forward direction Further he adds in the post-pandemic world the Industry is most likely to bounce back with a more sustainable technology-enabled approach.
The extent of COVID-19 impact on the Industry
The industry has witnessed a huge backlash because of the safety precaution that culminated in a lockdown mode for half of the financial year which impact their bottom line in 2021. The unprecedented situation led to a never seen before global lockdown and movement being restricted via curfews, as children we hated curfews growing up and as adults it did not make us change our stance towards it.
This led to a mass postponement of sports events and leagues which directly affected the sports fantasy market. In India the scenario was similar with Indian Premier League being postponed which makes upto 30 to 40% of revenue for such operators, Later the IPL was successfully conducted in Dubai leading to a surge in online viewership.
According to Girish Menon, Head of Media and Entertainment and Partner at KPMG India, he believes in the long-term prospect of the industry COVID-19 is nothing but a short-term slip. As in-person attendance still remains in doubt or in certain cases it has been partially lifted, it creates an opportunity for Fantasy Sports Operators to provide a more immersive fan experience online by engaging them he says, it plays a pivotal role in connecting fans to their favorite sports.
While the industry, in general, has turned profitable and a major participating factor is the sports data providers who form the backbone of the industry. Over the years many fantasy sports data providers have propped up to support the industry by providing quality rich data one such provider, for example, is Data Sports Group, which has excelled at proving Fantasy sports data be it Daily Fantasy Sports data or seasonal. They are a cost-effective option for operators to choose and their experience makes them reliable and trustworthy and running your fantasy sports platform on API is what lies in the future of the industry. With the widest coverage possible they aim to provide everything under one roof making expansion all the easier. Supported with open documentation and a dependable backend service you could not go wrong with them.
