The Rapid Growth of Fantasy Sports Platforms: Causes, Pros & Cons The rapid growth in this industry has a bunch of advantages like creation of opportunities for young entrepreneurs to start a business without any entry or exit barriers
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Online fantasy sports platforms (OFSPs) are websites or mobile apps wherein users can assemble virtual teams composed of dummy players from a professional sport. Users can then choose ongoing contests and participate, and if their skills are well in place they have a chance to get various rewards such as in-app bonus or real cash prizes, and so these games are often referred to as online real-money games.
The legality of fantasy gaming in India was interpreted by the judiciary through the "dominant factor test' in order to judge whether fantasy sports is a "game of skills' or "game of chance'. However the regulations pertaining to OFSPs are under the domain of state legislature and hence some states such as Andhra Pradesh, Telangana, Odisha, Assam and Tamil Nadu have enforced complete bans on online real-money games. Whereas some like Sikkim and Nagaland have made it mandatory for such platforms to have formal registration and hold a special license. In Delhi, Mumbai, UP, Punjab and Haryana and many other states have no restrictions on OFSPs.
Despite such challenges the growth OFPSs both inside India and globally in the past few years has grown exponentially with massive year on year increase. The Indian OFSP industry is growing at an impressive 32 per cent CAGR and is expected to reach $3.7 billion by FY2024. At a global level, North America is the most dominant amongst all due to strong IT sector and huge popularity of multiple sports apart from cricket like, football, baseball, basketball etc. India competes with China for the spot of prime dominance in the market of fantasy sports, however this completive nature is the key cause behind the drastic growth of online fantasy sports in Asia Pacific region.
India's massive population, especially of people within the age group of 18 to 40 years old that's also the main target audience for OFSPs is providing a huge pool of active users. The pace with which Internet access and related infrastructure has increased in India touching even the most farfetched areas is also a contributing factor the growth of OFSPs in India as many platforms strive to make apps and website more comprehensive and easy to understand, some even have options to switch the interface to vernacular languages to gain maximum user base.
The growth of OFSPs can also be associated directly & indirectly with India's love for cricket and also the fact that India hosts the largest cricket league in the world, IPL. However mostly OFSPs do feature other sports as well but cricket draws majority of users. In the recent years, with the wave of Made in India, indigenous OFSPs have gained encouragement from many directions and NITI Ayog will soon be issuing legal guidelines to keep a check on this booming industry.
The rapid growth in this industry has a bunch of advantages like creation of opportunities for young entrepreneurs to start a business without any entry or exit barriers and doesn't need a massive initial investment. In the initial stage it can even be bootstrapped while making good business. In terms revenue generated from OFSPs, they add a significant value to Indian economy as from of business. The gross revenue generated by Indian fantasy sports operators went from $131.64 million in FY 2019 to $340.47 million in FY 2020 which refers to x3 Y.O.Y (Year on Year) growth.
It is also generating employment as companies are doing good business, subsequently expanding their entities, they are creating job opportunities. Apart from cricket, the growth of OFSPs has also led to an increase public's interest in other sports like football, hockey, kabaddi etc. hence economic interests of sponsors in such sports have increased as well.
With everything going considerably well for the OFSPs industry, some shortcomings are also noticeable, the most prominent of which is fraudulent sites or apps that scam users and in many cases have fled away with customer's cash deposits and other sensitive user information. Repeated disclaimers are provided by all OFSPs regarding all the financial risks involved in the game and that fantasy sports may be addictive, so players must play responsibly.
Repeated disclaimers are provided by all OFSPs regarding all the financial risks involved in the game and that fantasy sports may be addictive, so players must play responsibly. However, it is evident that fantasy sports being a game of skill, encourages user to understand, experience and analyse aspects related to the game and then get to playing.