Neil Banerjee
India’s fantasy sports industry is set to grow at a compounded annual growth rate (CAGR) of 33 per cent, with 50 crore users expected by financial year (FY) 2027, according to a report by the Federation of Indian Fantasy Sports (FIFS) and Deloitte India. The report also projected foreign direct investment (FDI) to cross the Rs 25,000-crore mark by FY2025 and Rs 11,300 crores in corporate taxes and TDS during FY2023-27. The industry, which is currently valued at Rs 75,000 crores, has emerged as a true manifestation of the government’s vision of ‘Make in India’ and ‘Atmanirbhar Bharat’.
The co-branded report, titled ‘Fantasy Sports: A catalyst for the sports economy’, studied the current landscape of the Indian fantasy sports industry and its impact on the Indian economy, outlining its key growth trends, its influence on the allied industries and finally its role in promoting India’s sports economy.
“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 on the overall economic health of our country. Even with these heartening trends, we believe we are just getting started. We are thankful to MEITY (Ministry of Electronics and Information Technology) and believe that under their regulation, our industry will accelerate growth, spur innovation and contribute even more significantly towards nation building. We look forward to achieving the PM’s vision of making India a global gaming superpower,” said Joy Bhattacharjya, FIFS Director General.
Industry overview
The Indian fantasy sports industry is the fastest-growing market in the world, with over 300 fantasy sports platforms (FSPs) and 18 crore users. The industry grew by 31% to Rs 6,800 crores in 2022. It is expected to touch Rs 25,240 crores by FY2027, the report points out.
As much as 60% of user transactions on the FS platforms have come in through tier 2 and tier 3 cities, which is a significant proportion and shows that the industry has penetrated deep into India’s heartland. These users are not just spectators of sports but are actively participating in fantasy sports games, which is driving the growth of the industry, the report says.
Industry’s contribution to India’s economy
The fantasy sports industry has contributed significantly to India’s economy. It has attracted Rs 15,000 crores in FDI till FY2022, which is expected to touch Rs 25,000 crores by FY2027. The industry has also contributed Rs 4,500 crores by way of taxes, which is expected to reach Rs 26,000 crores in the next 5 years, the report adds.
The GST contributions from the fantasy sports industry are expected to increase by 5x in the next 5 years, from Rs 2,800 crores in FY2018-FY22 to Rs 14,700 crores between FY2023-27. The fantasy sports industry has created high-skill jobs for 12,800 people across the economy, creating a far greater impact on society and on the larger ecosystem. FS platforms indirectly employed 7,500 professionals in FY2022 and are expected to generate 10,500 indirect job opportunities by FY2027, according to the report.
Driver of India’s sports economy
The report highlights that fantasy sports platforms are driving the growth of India’s sports economy. FS players invested Rs 3,100 crores towards the development of the sports ecosystem by way of sponsorships and partnerships with various sports leagues in FY2022. This number is expected to reach Rs 6,500 crores in FY2027.
With the increasing participation and viewership of women in sports, their participation in FS is also growing, and they make up an estimated 30% of the user base at present.
Opportunities for growth:
- Favourable Regulatory Framework and Nodal Agency Will Spur FDI
The Indian government has recognised the potential of the fantasy sports industry and has put in place regulations that have provided a boost to the industry. The FIFS has been working closely with the government to ensure that the regulations are supportive of the industry and help to promote its growth. The report notes that the establishment of a nodal agency for the industry and a favourable regulatory framework will further spur foreign investment in the industry and help it to achieve its growth potential.
- Growing Interest in and Viewership of Sports Other Than Cricket
India has always been known for its love of cricket, but the report notes that there has been a growing interest in and viewership of other sports, thanks in part to the fantasy sports industry. The report notes that the industry has played a key role in promoting non-cricket sports in India, with 69.8% of users strongly agreeing that they started to watch new sports and learn about new players and leagues as a result of their interest in playing fantasy sports. This presents a significant growth opportunity for the industry, as it expands its offerings to include a wider variety of sports.
- Inception of New Leagues Such as Women’s Premier League and Women’s T20 World Cup
The inception of new leagues such as the Women’s Premier League and the Women’s T20 World Cup presents a significant growth opportunity for the fantasy sports industry. These leagues have helped promote women’s sports in India and have attracted a large number of viewers and fans. The report notes that fantasy sports players invested Rs 3,100 crores towards the development of the sports ecosystem by way of sponsorships and partnerships with various sports leagues in FY2022. This number is expected to reach Rs 6,500 crores in FY2027, presenting a significant opportunity for the industry to further support the development of these leagues and attract more fans.
- Overall Spotlight on the AVGC Sector
The fantasy sports industry is part of the larger audio-visual, gaming, and animation (AVGC) sector, which has been receiving significant attention and support from the Indian government. The report notes that the overall spotlight on the AVGC sector presents a significant opportunity for the fantasy sports industry, as it will help attract more investors, entrepreneurs, and consumers to the sector. The industry’s innovative use of AI/ML algorithms and white-labelling software for global companies also makes it well-positioned to break into the web3 space.
- Increase in Digital Payments
Digital payments have played a crucial role in facilitating the overall economy, and FS is an example of a system that has profited from the growing acceptance of electronic transactions among customers. The convenience of conducting online payments primarily stems from the confidence placed in the UPI system, which is supported by the mandatory Know Your Customer (KYC) regulations essential for facilitating this payment method.
Conclusion
The FIFS-Deloitte report highlights the impressive growth of the Indian fantasy sports industry and its positive impact on the Indian economy. The industry is expected to grow at a CAGR of 33%, reaching 50 crore users by FY2027. The industry is also projected to cross the Rs 25,000-crore mark in FDI by FY2025, with Rs 11,300 crores expected in corporate taxes and TDS during FY2023-27.
“Our analysis suggests that fantasy sports hold tremendous potential to help build a resilient sports ecosystem in India and significantly contribute to the nation’s digital economy. The increased allocation for sports in the 2023 Union Budget, new innovations, investor confidence and growing consumer demand will help generate fresh prospects for entrepreneurs and stimulate the advancement of this sector in India,” said Prashanth Rao, Partner, Consulting, Deloitte India.
Furthermore, the report highlights that the Indian fantasy sports industry is a true manifestation of the Indian government’s vision of ‘Make in India’ and ‘Atmanirbhar Bharat’. The industry is made in India, by Indians, for Indians, with a few examples in emerging digital industries, such as OTT and e-commerce. The industry has also rapidly become a hotbed for innovation, championing advanced AI/ML algorithms, white-labelling software for global companies, and breaking into the web3 space. In this manner, the Indian fantasy sports industry also exemplifies the Digital India philosophy.
The FIFS-Deloitte report underlines the immense potential of the Indian fantasy sports industry and its ability to contribute significantly to the Indian economy. With favourable regulatory frameworks and growing investor confidence, the Indian fantasy sports industry is poised for rapid growth in the years to come.
