Indian fantasy sports platforms report three-fold jump in FY20 revenue: Study
- This three-fold growth was registered despite the impact of the pandemic on revenues for the last 15 days of March when government restricted businesses activities and announced the nationwide lockdown
Before covid-19 pandemic wreaked havoc across the world, the Indian online fantasy sports industry was thriving, says a joint report by the Federation of Indian Fantasy Sports (FIFS) and KPMG released on Thursday. According to the findings, the gross revenue of online fantasy sports (OFS) operators including Dream11 trebled to ₹2,470 in FY20 versus ₹920 crore in the previous fiscal. This three-fold growth was registered despite the impact of the pandemic on the revenues for the last 15 days of March when government restricted businesses activities and announced the nationwide lockdown.
According to the report, the OFS market clocked Contest Entry Amount (CEA) ₹16,500 crore in FY20 versus ₹6,000 crore in previous financial ye. CEA is the amount of money that a user pays to the operator to play a match on its platform. This means that the number of users paying money to play fantasy games on various platforms has significantly increased.
Notably, the growth is led by the increase in overall userbase and the number platforms. While users grew from two million in 2016 to 90 million in 2019, the OFS platforms increased from less than 10 operators in 2016 to over 140 by 2019.
Led by this, Indian online sports fantasy industry indirectly generated ₹2,600 crore revenue for the ancillary industries as well including payment gateways, technology providers, media platforms and agencies. It has created 3,400 direct and over 5,000 indirect jobs. In addition to cricket, the top OFS operators have ventured into other team-based sports such as football and kabaddi which brings seasonality and reduces over dependence on a single sport. It has reduced the share of cricket as a percentage CEA from 95% in 2016 to 85% in 2019.
As per the report, growth in digital infrastructure, increase in online transactions, growing popularity of sports leagues, operator investments in technology and reaffirmation of the legality of the fantasy sports format in India are some of the growth drivers for this space.
“While covid-19 may result in a temporary blip in the upward trajectory of the fantasy sports segment, the medium to long term growth prospects of the segment remain robust, with the gradual return of international sport. Further, in a post covid world, with social distancing measures in place, fantasy sports is likely to play an increasingly important role in connecting fans to their favourite sports and increasing fan engagement,” said Girish Menon, partner and head, media and entertainment, KPMG in India.
Despite lockdown and covid disruption, global football leagues like Bundesliga, English Premier League, Serie A and La Liga have commenced. The possibility of Indian Premier League (IPL) starting towards the fag end of the year is likely to provide relief to the online fantasy sports industry in the country.
"In absence of live events in the last few months, the business has taken a massive hit. With football and basketball leagues starting globally, I feel the worst is behind us. Hopefully, sports tournaments in India including IPL will also resume. The recovery will be quick as there is immense pent up demand for sports," said Amrit Mathur, strategic advisor, FIFS.
There is growing enthusiasm among users about online fantasy sports as well revealed a dipstick survey by KPMG conducted on 763 respondents across 10 cities. Of these 253 were OFS users (having played OFS in the last one year) and the rest were categorized as non-OFS users. Overall, 65% of the respondents indicated sports was among the top three genres they watched on TV and OTT platforms.
A total of 32% said they engage with more than one sport on the OFS platforms; incentivizing operators to expand their sports offerings. Over 65% of these respondents indicated that there is a direct increase in the time spent in analysing, watching and reading about the Sport once they start playing fantasy sports online.
However, there are key challenges which includes high dependency on cricket, seasonality, consumer perception of OFS being a game of skill, low entry barriers, play store listing limitation and low women participation.
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First Published:9 Jul 2020, 05:49 PM IST
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