Priyank Pithwa, a resident of Surat in the western Indian state of Gujarat, claims in a promotional video, that he has won a whopping Rs1.2 crore ($163,424) playing fantasy cricket on an online gaming platform, Mobile Premier League (MPL).
He isn’t alone. With the Indian Premier League (IPL) in full swing, cricket fans in India are flocking to the online sports fantasy league apps, lured by hopes of winning big cash rewards.
The surging popularity has also translated into strong growth for these startups. The revenue of the fantasy sports industry in India spiked by 3 times to Rs2,400 crore in the financial year 2020.
Smelling huge opportunity, new online sports fantasy league platforms are mushrooming. There are now more than 140 such platforms, in comparison to just 10 in 2016.
“Fantasy sports is at an early stage in India, with several start-ups racing to attract the country’s 800 million sports viewers. This trend will continue as these companies push into various sports leagues to attract advertisers, investors, and customers,” said Rupantar Guha, thematic analyst at consulting firm GlobalData. Apart from Indians’ unending love for cricket, cheap data plans (thanks to Reliance Jio) and penetration of mobile phones have made these startups lucrative bets for investors.
Over the last five years, investors have pumped $112 million into India’s sports fantasy platforms.
Much of the recent euphoria is fueled by the success of Dream 11, a 12-year-old fantasy league app that became India’s first gaming unicorn in April 2019. The app now has around 75 million users and has even managed to bag the title sponsorship of the IPL this year.
The second-most valued venture in the space is MPL, which has 60 million users and the backing of some of the marquee investors such as Sequoia Capital.
Flush with investments, the MPL is also on trying to expand at a fast pace. It has managed to get its brand’s name on the kits of cricketers by becoming sponsors for Royal Bangalore Challengers.
Some of these startups have roped in current and former cricket heavyweights—such as chief of Indian cricket board Sourav Ganguly and current Indian captain Virat Kohli—and are paying a big buck to splash ads between the IPL matches.
But it won’t be as easy as batting on a flat pitch.
Anti-sports betting regulations in India
With the space sparking the interest of domestic and international investors, the competition is becoming intense. This means more cash burn is inevitable to stay afloat and compete.
“Backing from investors and sports franchises will be essential for survival in an increasingly competitive market,” said Guha of GlobalData.
Guha also suggests that these startups should diversify their services to overcome the reliance on seasonal tournaments.
Besides, the regulatory shadow also looms large.
While betting on sports is banned in India, the state-level high courts have given fantasy sports a clean chit to operate, calling them “a game of skills.”
“However, ‘predominance of skill test’ is subjective and its applicability will vary depending on the format and offerings of each fantasy sport,” said Gerald Manoharan, partner at a legal firm J. Sagar Associates.
It’s due to this lack of clarity that Google ousted Paytm from its play store. The internet search giant claimed that the fintech firm was promoting a sports fantasy league that violated its anti-gambling policies.
“Regulations will be a concerning factor, as states such as Telangana, Odisha, Assam, and Sikkim are opposed to fantasy sports betting, potentially restricting the prospects for pan-India growth,” warned Guha.