With its engineering base and digital infrastructure, India has the potential to be the global hub for Fantasy Sports
To be the manager and coach of their very own team – this is the dream of every die-hard sports enthusiast – living out their “Brad Pitt” fantasy in their own Moneyball world. “Fantasy” Sports is just so aptly named. It started in the 1960s when folks from the Oakland Raiders outlined the beginnings of what turned into modern fantasy football rules. Fast forward to the 1980s, a group of journalists developed the Rotisserie system for fantasy baseball. Today Fantasy Sports is a worldwide phenomenon. According to the report published by Allied Market Research, the global fantasy sports market was estimated at $18.6 billion in 2019 and is anticipated to hit $48.6 billion by 2027, registering a CAGR of 13.9% from 2021 to 2027.
A technology-based enabler to enhance user experience and increase engagement
Fantasy Sports came to India in 2001 via ESPN Star Sports as ‘Super Selector’. However, after just 2 years it was phased out and eventually stopped. It has now staged a comeback, almost a decade later, and this time it is here to stay. These “fantasy sports platforms” now draw millions of users each year, and with good reason. The platforms offer intense fan competition, chance to own a team and the thrill of victory all in the palm of your hand.
An ongoing difference of opinion that has choked the growth of fantasy sports – is it based on chance or on skill? Thankfully, numerous court rulings and studies in India and across the world have concluded that fantasy sports are predominantly skill-based and not chance. Despite being in its infancy, the industry is already serving over 100 million Indian users and one can reasonably expect this number to continue rising. Easy access to scalable technology, high penetration of internet and smartphones, coupled with the love for cricket, has aided and fueled the adoption of fantasy sports in India.
Network effects spanning across the digital economy
The emergence of Fantasy Sports and their increasing popularity in India makes Indian enterprises a very attractive proposition for investors. The industry has already received Rs 1,000 crore in foreign investment and is expected to attract an additional Rs 10,000 crore in the next five years. A secondary benefit has been growth in digital transactions, which drives financial inclusion, transparency and cost efficiencies. Industry estimates suggest that fantasy sports have the potential to generate 1.5 billion online transactions by 2023.
Call for uniform and streamlined regulations to propel further innovation
As is the case with any emerging technology, regulation typically struggles to keep pace with the rate of change. It is therefore important to set up light-touch regulatory frameworks that can complement the dynamic nature of disruptive technologies. The Government of India has actively sought to support market creation and growth for disruptive technologies, such as artificial intelligence and blockchain, through progressive policy interventions. New industry segments too, such as cab aggregation and e-commerce, have faced initial regulatory hurdles given their disruptive nature. Such roadblocks have resulted in a re-look of existing policies and aligning them with the changing times.
And therefore, the recently released Draft Guiding Principles for Regulation of Fantasy Sports Platforms by NITI Aayog are an encouraging sign for the sports tech industry at large. They will help eliminate ambiguity around Fantasy Sports and dispel the concerns harboured by many. More importantly, the setting up of a dedicated self-regulatory organization, as proposed in the Guiding Principles, will significantly improve the industry’s ability to effectively address user concerns and ensure that unscrupulous operators are deterred and weeded out.
Regulation makes “fantasy” safe and good for business
The regulation will provide the right framework for Fantasy Sports industry integration with the overall economy. Furthermore, having a representative regulatory body with uniform guidelines for the new industry will boost stakeholder confidence and help the industry achieve its full potential.
Disclaimer- It was first published in Financialexpress.com.