Fantasy sports: Entering the big league

India’s Fantasy Sports market has the fastest growth rate globally, with a user base almost three times that of the North American market, which is a much more established market and leader in terms of revenue. The industry has a huge growth potential and is expected to grow at a compound annual growth rate (CAGR) of 33%.

This IBT article will provide a detailed outlook on the Indian fantasy sports industry and its potential. 


India’s sports industry has a history of almost a century and occupies a significant position in the global market. The industry has grown substantially due to a highly skilled workforce and is recognized for its contributions to the economy as well as employment. But over the course of the last 5 years, the popularity of fantasy sports in India has reached a new high.

Today, the role of Fantasy Sports (FS) in the sports economy is significant. The fantasy sports industry in India has experienced tremendous growth, with over 300 fantasy sports platforms and 180 million users. Financial advisory firm Deloitte and the Federation of Indian Fantasy Sports (FIFS) have released a new report stating that the industry is expected to grow at a CAGR of 33% to reach Rs 25,300 crore in FY27. The report also predicts a projected user base of 50 crores.

Launching the report, FIFS Director General, Joy Bhattacharjya said “We are thrilled to see the outstanding growth of India’s Fantasy Sports industry and its positive impact on the sports economy as well as the overall economic health of our country. Even with these heartening trends, we believe we are just getting started.”

Fantasy Sports Industry: A hot investment destination?

Fantasy sports allow players to actively engage with sports events, creating a more immersive experience. They are generally online games where players assemble imaginary or virtual teams, which are proxies for real players, and the players qualify based on real player performances in actual games. Additionally, it supports teams and tournaments through sponsorships, creating a virtuous cycle of value generation that benefits athletes and bodies that invest in infrastructure and grassroots-level sports. India is the fastest-growing Fantasy Sports (FS) market, with a user base almost three times larger than North America, which is a more mature and revenue-leading market.

Notably, the industry is essentially young, with 40% of the user base in the 25-34 age group, evenly split across metros and non-metros and predominantly male. The report reveals that the growing interest in fantasy sports is expected to create over 12,800 high-skilled jobs by FY27, while indirectly employing 10,500 professionals. The industry is currently valued at Rs 75,000 crore, with 60% of user transactions coming from tier II and III cities. Additionally, it has attracted a cumulative investment of Rs 15,000 crore till FY22, of which FDI accounted for 66%. Also, it has contributed Rs 4,500 crore by way of taxes.

It is noteworthy that fantasy sports platforms are also attracting users to non-cricket sports as well. Handball, volleyball, and futsal have started gaining traction. Even Kabaddi witnessed significant user growth, rising from 9% in FY21 to 26% in FY22 due to popular leagues such as Pro Kabaddi and the Senior National Kabaddi Championship. Additionally, the user base for basketball and baseball has grown, from 4% to 7%, and from 2% to 5%, respectively.

Growth Path for FS Industry

  1. Need for a stable taxation regime

The online fantasy sports (FS) industry has contributed INR 2,800 crore in GST between FY18 and FY22 and is expected to contribute INR 17,500 crore between FY18 and FY27. Currently, the industry is subject to an 18% GST on the Gross Gaming Revenue (GGR). However, a Group of Ministers (GoM), formed to examine GST on online gaming, proposed a 28% taxation on the total consideration. It was referred back to the GoM for reconsideration by the GST Council. The GoM is said to have agreed to a rate hike from 18% to 28%, but a consensus on the value of supply has not been reached yet. If the value of supply of GST is changed to the total consideration, it will adversely impact FSP (fantasy sports platforms) margins and viability.

One such case is France. It once levied taxes on the total consideration, and saw declining profitability for its platforms, leading to consumers opting for offshore platforms and the proliferation of a black market. Therefore, French authorities proposed levying taxes on GGR. The same trend was observed in the UK as well, where the transition to taxation on GGR had a positive impact on the industry. To run the industry smoothly, the nation needs to come up with a stable tax regime that can further benefit FSPs by not hampering their growth.

  1. IT Rules and Fantasy Sports

Early this month, the Ministry of Electronics and Information Technology (MeitY) released new IT rules which prohibit wagering or betting in online games. Additionally, the rules state that these games should not harm users with their content and also further should not lead to any addictive consequences among children. Moreover, online gaming intermediaries (OGI) should not host any games on its platform which is not allowed or verified by the self-regulatory organization. These rules have the potential to play a crucial role in the growth of online gaming by providing a stabilized and safe structure.

With the rate at which the FS market is rising, these IT rules are going to act as a booster. The right regulations will provide security not just for consumers but create a safe space for investors to enter.

Final Word

The online fantasy sports industry has benefited various other industries such as online sports streaming, content aggregators, sports merchandise, e-commerce, and digital payments. With now more transparency in regulations, a sustainable environment can be created for the fantasy sports industry.

In addition to this, India’s growing digital infrastructure, along with increased rural digital penetration and upcoming regulatory clarity, is expected to increase the user base of various digital platforms, including fantasy sports. This expansion, in turn, would improve monetization and contribute to overall economic growth.

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