In India, online fantasy sports gaming has seen an exponential growth in last two to three years
The Indian Premier League (IPL) has got a new title sponsor in Dream11, a fantasy sports gaming platform.
This shows how big fantasy sports has become in India - so big that Dream11 managed to outbid a conglomerate that was in the race to get IPL’s title sponsorship after Vivo announced its exit from the league due to rising anti-China sentiment.
Fantasy sports and its dream run in India
In India, online fantasy sports gaming (OFSG) has seen exponential growth over the last three years.
Number of fantasy sports operators saw 7x growth over 2016-2018, while the number of users grew by over 25x from June 2016 to February 2019, according to a 2019 report by the Indian Federation of Sports Gaming (IFSG) and KPMG.
The Federation of Indian Fantasy Sports (FIFS) in a joint report with KPMG recently said the number of operators increased to 140 in 2019. The report also said the number of users grew to 90 million in 2019, from two million in 2016, which is expected to touch 100 million by this year.
FIFS, which is the governing body for fantasy sports in India, also pointed out that overall revenue of fantasy sports in India saw a three-fold growth from Rs 920 crore in FY19 to Rs 2,470 crore in FY20.
In addition, the contest entry amount (CEA) grew from Rs 6,000 crore in FY19 to Rs 16,000 crore in FY20. This signals to the fact that more Indians are paying for online fantasy games.
Along with CEA, other revenue streams for fantasy sports platforms include advertisements, contest sponsorships, and brand partnerships.
In the overall gaming space, experts say real-money games, which include fantasy sports, make up more than 40 percent of all revenue.
Dream11 - the star player
In this growing market of fantasy sports, the biggest player is Dream11 which commands 90 percent market share, according to the IFSG-KPMG report.
On the Dream11 platform, share of cricket as a sport is 85 percent, which tells us how important IPL is for the platform.
Experts say Dream11, which became India’s first gaming unicorn last year, has proved to other players the scalability of fantasy gaming.
And now Dream11 as IPL’s title sponsor will put even more focus on fantasy sports in India.
Higher engagement amid Indians
Indians, who are already playing a lot of fantasy sports, will engage more thanks to the 13th edition of IPL.
If we see the frequency of engagement on fantasy platforms, the IFSG-KPMG report shows Indians play fantasy sports 1-3 times a week, with the majority playing once a week.
However, 20 percent of 336 respondents surveyed by IFSG-KPMG, reported playing more than five times a week.
The engagement frequency in the income group earning less than Rs 3 lakh per annum is the highest with 40 percent of the respondents in the category playing fantasy sports more than five times a week.
The frequency of playing fantasy sports more than five times a week was found to fall progressively with increasing income levels, with only 12 percent of the respondents earning more than Rs 10 lakh per annum playing more than five times a week.
The report said this data implies that fantasy sports platforms could potentially be considered as means for earning incremental/supplementary by comparatively lower income groups, leading to an increased engagement with the fantasy sports platform.
All these reasons have been enough for many investors to invest in fantasy sports companies over the last few years.
Key investors in this space have been Kalaari Capital, Think Investments, Tencent, Kae Capital, Nazara Games, among others.