Industry estimates indicate that OFS platforms and operators cumulatively paid GST to the tune of ₹445 crore in FY 2020, substantially higher from ₹166 crore in FY 2019
NEW DELHI :
India is fast emerging as the destination for fantasy sports, propelled by the overwhelming penetration of internet, adoption of smartphones, which is also seen to be contributing towards the growth of sports across the country.
Cricket continues to dominate the sports arena, but the emerging generation is fast developing interest in other sporting activities, including hockey, kabaddi, football, basketball, volleyball, and baseball. This growing interest in other sports can be attributed partly to fantasy sports, which resulted in bringing together many large brands and celebrities, said a white paper by Indiatech.
Fantasy sports are not like any other form of online gaming as it is dependent on actualities, seasonality and availability of real-time sports matches, which makes it a non-addictive form of play. This sets it distinctly apart from other forms that are perceived to be in the nature of gambling or betting.
The Indian fantasy sports market has shown phenomenal growth. Gross revenues of online fantasy sports operators stood at ₹2,400 crore in FY20 compared to ₹920 crore in FY19, up almost three times year-on-year, according to the FIFS-KPMG 2020 report.
The whitepaper by Indiatech said Indian online fantasy sports platforms attracted considerable foreign investment. According to the FIFS report, between 2018 and 2019 the inflow of foreign investments has been to the tune of ₹1,500 crore.
Industry estimates indicate that online fantasy sports platforms and operators cumulatively paid ₹166 crore in goods and services tax (GST) in FY19 and ₹445 crore in FY20.
Online fantasy platforms (OFS) and operators also deduct tax at source applicable on winnings, before disbursing the amounts to the winners. The tax deducted at source on winnings in FY 2019 was to the tune of Rs93 crore and increased to Rs250 crore by FY 2020, according to industry estimates.
The online fantasy sports business has also contributed to other existing businesses such as online sports scoring platforms, content aggregators, sports merchandising and e-commerce, online sports streaming and digital payments. Several large brands are eyeing online fantasy sports as a medium to market their products.
According to KPMG, the Indian online gaming industry revenue is already worth $43.8 billion and is said to reach $118.8 billion by FY23 with a compound annual growth rate (CAGR) 22.1%. Indian fantasy sports industry, however, is growing at a CAGR of 32% and its worth is expected to be $3.7 billion by the year end 2024. The Indian Premier League (IPL) continues to be the most popular league with platforms such as Dream11, Mobile Premier League, and MyTeam11 leveraging its popularity.
Abhishek Madhavan, vice-president, growth and marketing at Mobile Premier League said fantasy platforms being associated with the IPL in a big way is great for the industry. “There will be a lot of new users getting initiated into fantasy sports as a result. This is exactly why we have sponsored two of the top teams in the IPL, Kolkata Knight Riders and Royal Challengers Bangalore. We expect to see 100% growth in the fantasy industry over the next two years, with the market consolidating under the top two-three players," he said.