The Rise & Rise of Fantasy Sports Gaming in India

Submitted To:
Dr. Shipra Wadhwa
Cluster Innovation Centre

Submitted By:
Ayush Sharma (11607)
Hanuman Meena (11609)
Ravinder (11622)

Bachelor of Technology in Information Technology and Mathematical Innovation (3rd Year)

Cluster Innovation Centre, University of Delhi

This report is submitted as the fulfillment of the project of E-Business: Organization and Strategy
In Semester VI of B.Tech (IT & Mathematical Innovation)
at Cluster Innovation Center, University of Delhi
Acknowledgement

We take this opportunity to express our profound gratitude and deep regards to our guide Dr.
Shipra Wadhwa providing us with this opportunity.

and for her exemplary guidance, monitoring and constant encouragement throughout the course of
the project. This project was next to impossible without her innovative sight and practical approach
towards learning. Her help and guidance given, time to time shall carry us a long way in the future
journey.

Moreover, we would like to express our regards to our institution. The culture and environment of
Cluster Innovation Centre is perfect when it comes to project and hands on learning.
At last, we would also express our thanks to various colleagues, who helped us at many stages to
overcome a lot of hindrances and helped us in understanding various aspects during the whole
course of project.
Abstract
A fantasy sport (also known less commonly as rotisserie or roto) is a type of online game
where participants assemble imaginary or virtual teams of real players of a professional sport.
These teams compete based on the statistical performance of those players' in actual games. This
performance is converted into points that are compiled and totaled according to a roster selected
by each fantasy team's manager. These point systems can be simple enough to be manually
calculated by a "league commissioner" who coordinates and manages the overall league, or
points can be compiled and calculated using computers tracking actual results of the professional
sport. In fantasy sports, team owners draft, trade and cut (drop) players, analogously to real
sports.

This report is an attempt to understand consumer interest and offer insights into the assuredly
bright future of Fantasy Sports within Sports Gaming in India. Early readings reveal the high
incidence of Fantasy Sports among the core male audience of 18-35 from NCCS AB towns.
Interestingly, Fantasy Sports is not an isolated metro phenomenon, but is growing rapidly in non-
metro cities as well.
Early history
The concept of picking players and running a contest based on their year-to-date stats has been
around since shortly after World War II. One of the earliest published accounts of fantasy sports
involved Oakland businessman and one time Oakland Raiders limited partner Wilfred "Bill"
Winkenbach. He devised fantasy golf in the latter part of the 1950s. Each player selected a team
of professional golfers and the person with the lowest combined total of strokes at the end of the
tournament would win. Golf is a simple fantasy game to administer and keep tabs on, since each
participant is concerned only with the scores of his or her team members without anything else to
complicate it. However, it was never organized into a widespread hobby or formal business.
Evolution of Fantasy Sport in India

Fantasy Sports has grown big in India and the industry is all set to break records when it comes
to engaging sports fans and testing their sports knowledge & skills. It is expected that in the
coming days almost all sports leagues in the country are going to offer their own fantasy leagues
to their fans similar to fantasy premier league which is the official fantasy football game of the
Premier League with more than 4.6 Million registered users. In India, IPL (Indian Premier
League) & ISL (Indian Super League) are already running their own official fantasy leagues.

From a business point of view, fantasy sport is a great start-up idea to invest in India. The
business model proves strong in terms of revenue and it ensures earnings through
advertisements, contest sponsorships, brand partnerships and entry fees.

Indian Fantasy Sports Industry Stats

India has grown higher in the fantasy sports domain with a whopping number of 7 million
players associated with the field. This number includes a variety of sports like Hockey, kabaddi,
cricket as well as football. In terms of percentage, the growth rate ranges from 30–50% per year.
Estimated numbers show that the country expects to reach a number of 50 million users in the
coming three years. In this digital era of internet, the trend of fantasy sports is also increasing
with each passing day.

Existing Fantasy sports operators in India

Since fantasy sports industry is new to the Indian market, the number of fantasy sports operators
offering fantasy in the market is not too high. The major fantasy sports operators/providers in
India are Dream11,Halaplay, Fanfight, Oye Captail, Cricnwin, Daily Fantasy Cricket, MPL,
Fandromedia, League Guru, Oyecaption etc. This clearly denotes that there is a lot of scope for
new entrants in the Indian market to start their own fantasy sports business in India.

Favourable Legality of fantasy sports in India

Indian legal system clearly separates fantasy sports from betting or gambling activities and
considers it a game of skill. A game where a sports fans are allowed to create their fantasy team
by combining players, who they feel are going to perform better than others in the real field
game.

The Public Gambling Act, 1867 which is a central government act comprises of 18 Sections. In
Section 12, it clearly states that — “Nothing in the provisions of this Act contained shall be held
to apply to any game of mere skill wherever played.” This statement confirms that fantasy sports
which is a game of skill are excluded from this act.

In a growing economy such as India, Fantasy sports on cricket, kabaddi and football have gained
huge popularity along with increasing pace of technology.

In a recent development, the Punjab and Haryana High Court in a 29-page order has clearly
stated that playing fantasy games online requires considerable skill, judgment and discretion
and such games can’t be considered gambling.
With this said, there’s no doubt in stating that India will continue to be a spot of attraction for the
foreign sports operators and sports industry in terms of expanding their operations. With about
500 million expected internet users in the year 2019 out of which 400 million accessing the
internet via mobile devices, India is a sure shot choice for fantasy sports operators.

Indian laws differentiate between games of skill and games of chance and specify a strict
prohibition on participation and offer of games of chance for stakes, while taking a more
favourable position with games of skill.

The Rise of Online Fantasy Sports Giants in India

The evolved sports fan, with an adventurous temperament and a native comfort with technology,
has taken no time to adopt and propagate Fantasy Sports. In Fantasy Sports, users become
participants by putting together virtual teams of real players. Unlike simulation games, outcomes
of Fantasy Sports are based on the actual statistical performance of players in real matches.
Success in the arena of Fantasy Sports is based on a keen knowledge of actual players, their
form, strengths, weaknesses and strategy. Therefore, it is essentially a Game of Skill. In India,
Fantasy Sports is widely played across Cricket, Football, Kabaddi and Basketball, potentially
giving over 2 crore sports fans in the country an opportunity to demonstrate their knowledge and
become a part of the action. Worldwide, Fantasy Sports is a burgeoning segment with several
operators, hundreds of businesses and millions of users. The genre has allowed fans to go from
being passive viewers to active users – with an opportunity to win in online versions of the game
by exercising their understanding of the offline version. As a fast-emerging section of Sports
Gaming, Fantasy Sports has found favour with all sports fans across India. The adoption is being
spearheaded particularly by independent, working professionals with a disposable income who
view Fantasy Sports as a means for entertainment and as an imperative part of their sports
consumption experience. The burgeoning interest in this field among consumers and the
subsequent entry of a slew of operators and service providers gave rise to the need for IFSG. As
a collective body, IFSG aims at furthering the cause of the industry and protecting the interests
of users. Today, Fantasy Sports in India has about 50-odd operators running the show. Among all
these operators, Dream11 has the biggest market share.

THE SIZE OF POTENTIAL USERS IS IN TENS OF MILLIONS

  A MASSIVE TWO OUT OF THREE ARE AWARE OF FANTASY SPORTS IN
INDIA
 Survey conducted by Nielsen in 12 cities in India. Amongst 2724 respondents
 TG- NCCS AB males, internet users with affinity to sports surface of Fantasy Sports
1

So, what next?

*Star Network projected viewership l **Source: eMarketer.com, Jan 2017| *** Cricbuzz/Hotstar Potential IPL 2018
unique reach l **** Dream11 registered user base as 31st May 2018
Because of this sentiment, the sports ecosystem is being pushed to innovate and deliver newer
formats to delight sports fans. Not long ago, this gave rise to sporting leagues that innovated and
devised fresh ways to engage fans, driving consumption through the roof. Pulsating at the cross
section of sports and technology, Sports Gaming is well-poised to be the next frontier in sports
engagement and consumption. With a delightful online-meets-offline and skill-meets-judgement
mix, Fantasy Sports, one of the most popular Sports Gaming formats, is ready to explode! In the
US, Daily Fantasy Sports is a 7.22 billion USD industry *. In USA and Canada alone, there are
59.3 million (5.93 crore) Fantasy Sports users. With India showing fervent enthusiasm, the
numbers are certain to swell very soon. 67% Indian males between 18-35 years are aware of
Fantasy Sports

USA AND CANADA MARKET

FANTASY SPORTS – WHO PLAYS AND WHY?

Changing consumption patterns spur innovation; new offerings enter the marketplace and
challenge behemoths, newer ways to consume existing offerings evolve, etc. However,
fastevolving consumer tastes also result in some great ideas that make a promising start in the
market, but fizzle out rapidly without being able to evolve efficiently enough to keep pace with
consumer demands. Therefore, the objective behind studying the Fantasy Sports market in India
was to analyse where it stands now and where it’s headed.

Fantasy Sports users are typically married men with high incomes. Non-users are more likely to
live in a nuclear household with a lower monthly income. The figures seem to support the
hypothesis that those with a higher monthly allowance are more probable to consume Fantasy
Sports.
KEY GROWTH INDICATORS OF FANTASY SPORTS AMONG CONSUMERS

Encouragingly, most people who are aware of Fantasy Sports try their hand at it and then
continue to play. This indicates a high level of engagement and affinity, which is reassuring for
operators and the entire ecosystem in India.

Benchmark Stickness-ONCE AWARE, USERS TEND TO CONTINUE TO PLAY

FANTASY SPORTS USERS ARE CONSISTENT WITH THEIR PLAYING PATTERNS
FANTASY SPORTS HAS BEEN EMBRACED BY METRO CITIES AS WELL AS NON-
METRO CITIES

HOW, WHEN AND WHY USERS ENGAGE WITH FANTASY SPORTS

DEVICES THAT POWER FANTASY SPORTS, AND CONTESTS THAT DRAW NUMBERS
Screens are getting smaller but their role in the lives of consumers are getting bigger to the point
of explosion. Today’s reality is that trends in device usage will certainly have significant
ramifications on entertainment and content. The device of choice for Fantasy Sports users, for
instance, is mobile (smartphone/tablet). India has been growing as a mobile-first nation, and
Fantasy Sports users have demonstrated just that as well.
Fantasy Sports users juggle multiple contests with almost as much ease as they juggle multiple
platforms. Statistically, 75% of users who play on a single platform participate in upto three
contests at a time. However, only 60% of those who play on multiple platforms can manage three
contests simultaneously

The rising popularity and adoption of Sports Gaming, and Fantasy Sports in particular, will
inevitably drive up sports consumption. The deeper engagement that Fantasy Sports drives in
consumers is likely to spur a greater passion for sports in general. In the brightest version of the
foreseeable future, innovation in the world of sport and the rapid growth of Fantasy Sports users
will nudge India to become a greater sporting nation.
Dream 11

Why just watch a sport when you can be a part of it and even earn money. That is what 27-year-
old Ramesh Ratul did when he competed with 7,851 teams online for the Big Bash Final, an
Australian cricket league. He bagged the Mega League Title and won a cash prize of Rs 25,000.

Like Ratul there are many who are engaged in fantasy sports leagues as they offer more
engagement, more excitement and handsome rewards, say online gamers.

Fantasy sports leagues in India are witnessing increasing traction as the number of users grew
from 0.2 crore in 2016 to 2 crore in 2018. In 2019, the number has gone up to 5 crore, according
to Parth Sharma, General Manager, strategic management, Ballebaazi.com.

He said that in the fantasy sports segment companies have seen a month-on-month growth of 15-
20 percent. "The whole fantasy group is having more than 5 crore individuals who are using
fantasy sport platforms and I see that growing 2x rate. It will be 10 crore very soon. It will
happen within 2019."

Currently cricket is contributing more than 90 percent in this space most of the websites are also
providing only cricket as their fantasy gaming option, kabaddi is growing very rapidly then there
is football, basketball, badminton and tennis."

But how do these leagues work?

Throwing more light on what fantasy sport is, With fantasy sports especially cricket what you
can do is before the game starts you can select a set of 11 players which you like and you think
will perform well. You can pick up a selector and then watch the game. So while watching the
game you will be engaged with the game and this is because you have your own stakes involved
in it and you can compete with your friends and win money.

There are mega leagues in which you can win up to Rs 4 lakh then there are champion and
grinder leagues in which you are against 300 to 400 gamers and you can win thousands. You can
also deposit Rs 39 and win Rs 20-30 lakh. These are mega amounts that are being distributed on
a daily basis. There is a lower level league also in which you need Rupee one or two to enter and
win Rs 500-Rs 1,000

There are as many as 70 operators in fantasy gaming industry in India and according to Sharma
gamers can play on multiple portals as these sports do not require much time unlike Rummy or
Poker.

"There is a difference between other online games like Poker and Rummy happening in India.
For these games you have to spend 4-5 hours to make hefty money but here you can spend 5
mins in making a team, just do your research and background," said Sharma.

Sports gaming is evolving thanks to "cheap mobile phone availability". "Internet connectivity is
one of the major reasons these games are growing. Users from a small village, if they
understands the game, can make money and be part of the fantasy sports. The fantasy sports
industry had a good boost because now people have learned to pay online, to be on the internet
and how to use it for these purposes.

But there is one other factor that is boosting the growth and that is clarity around the legality of
the format.
So, all the states have distinguished between skill based game and chance based game. And
fantasy sports have been defined as a game of skill by almost all the states barring Telangana,
Orissa and Assam. Other states consider fantasy sport platforms legal, A game of skill is when a
gamer wins or loses due to his/her judgement or skill and not because of chance.

“Today, Indian sports fans enjoy a truly immersive and engaging viewing experience thanks to
the convergence of sports and technology. With the advent of affordable smartphones and high-
speed internet access, there has never been a better time to be a sports fan in India. The rise of
Sports Gaming has been the perfect catalyst in helping fans engage even more with the sport they
love. Over the past decade, Fantasy Sports has been at the helm of evolving the Indian sports
fans’ experience by giving them the perfect platform to showcase their sports knowledge and
skill. 800 million Indian passive sports viewers now have the opportunity to become active
participants in every single match. Fantasy Sports is the start of a revolution that will change the
face of the sports industry forever. And this is only the beginning” says Harsh Jain, CEO & Co-
Founder Dream 11.

To be sure, Dream11’s journey began all the way back in 2009, when two childhood friends
Harsh Jain and Bhavit Sheth, who were also avid sports fans and engineers, started the company
with a firm belief that sports fantasy leagues would become a big business opportunity in a
country of a billion-something cricket fans.

The idea to launch Dream11 first took shape in 2008, when IPL was launched. At the time,
Harsh, who was already familiar with the thrill of playing EPL fantasy football since 2001,
began looking for a similar platform to play online fantasy cricket in India. He was shocked to
learn that fantasy cricket did not exist in a country like India, where cricket is a religion and
ardently followed by millions of Indians.

Determined to solve this problem, Harsh, who is an alumnus of the University of Pennsylvania
and Columbia Business School, asked his friends if they wanted to join him in this quest. This
eventually led to him co-founding Dream11 in 2009 with Bhavit, an alumnus of Bentley
University and Harvard University.

The duo first started experimenting with various formats on Dream11 and pivoted multiple times
over the span of three years, before finally finding a product-market fit with freemium single-
match fantasy sports in 2012. Over the years, Dream11 has evolved into India’s biggest sports
gaming platform, offering multiple sports – fantasy cricket, football, kabaddi, and basketball – to
its four crore strong user base of Indian sports fans. Today, the company, which is yet to turn
profitable, commands a large revenue base of close to Rs 100 crore (not disclosed yet in 2018);
in FY 2017, it ended the year with Rs 62 crore.
Dream11 raised $100 million from Chinese company Tencent last month, everyone went gung-
ho over another Indian startup making it into the big league of invested companies. The latest
fund-raising led by the Chinese investor helped take Dream11’s valuation to $700 million-$800
million. And yet, as is true with every other successful startup, there is a back-story ridden with
challenges and triumphs that are not immediately clear to all and sundry.

Game of Skill

To understand Dream11 is to know that it is a game of skill. Dream11 offers sports enthusiasts a
single-match daily fantasy sports platform where they can leverage their knowledge and
showcase their skills in a particular sport, in return for instant gratification in the form of
bragging rights and winnings.

Fans can also be team owners, rather than just spectators, as Dream11 allows users to create their
own team of real-life players for upcoming matches, score points based on their on-field
performance, and compete with others. The company is also the official partner of the top global
sports leagues, such as the ICC CWC 19, Vivo IPL, Vivo PKL, FIH Hero CPL, Hero ISL, and
NBA.

“It was an alien product for the Indian market,” said Harsh, recalling the challenge they faced in
launching fantasy sports in India for the first time in 2008. “This meant that we had to hard sell
the concept to potential hires, investors, and, most importantly, users,” he added.

And yet, today, nearly a decade later, Dream11 manages payments and payouts to winners,
having earned the trust of over four crore users.