By Anand Parthasarathy
Aprill 27,2023: In the world of spectator sport in India, the tail wags the dog. More people play games in an imaginary version in their heads, than even went to the stadium to watch the real thing. And it’s not all what we like to call ‘time-pass’: lots of people make a pretty packet with their well-honed techniques.
Say hello to Fantasy Sports (FS), a burgeoning sector in the world of online – mostly mobile—gaming that within less than a decade has seen India streak ahead as its fastest growing market in the world. 
A study released last week and undertaken by global consultants Deloitte, for the Federation of Indian Fantasy Sports (FIFS), confirms what many in the entertainment business suspected:  mixing sport with maya-jaal or make-believe means big money:
The Fantasy Sports industry is currently estimated by Deloitte, to be worth Rs 75,000 crore; growing steadily at 31% from Rs 6,800 crore last year, expected to cross Rs 25,240 crore by 2027; currently raking in Rs 4,500 crore in taxes for government, a figure that is likely to hit Rs 26,000 within 5 years, employing nearly 13,000 people, many with high tech skills, spread across over 300 playing platforms. Boasting 18 crore users today, FS is estimated to engage 50 crore users in another 4 years.
Yet this mega entertainer-cum-revenue-generator is still looked upon with a beady eye by the government, and with some embarrassment by   spectator sports administrators. They seem to be ready enough to partake of any largesse that FS dishes out, but are a wee bit ashamed of the connection. Many in positions of power seemingly think they are somehow sending out a macho message by being tough on FS: At least four states – Andhra Pradesh, Assam, Odisha and Telangana -- have outright banned fantasy game playing, while Nagaland and Sikkim have hemmed FS gaming companies with so many conditions that it is difficult to operate in their states.
This is in spite of a Supreme Court decision in August 2021, reiterated by a larger Bench in November 2022, that   upheld the contention of the leading   games platform, Dream 11, that Fantasy Sports were not games of chance, but games of skill. This judgment led to state governments in Karnataka, Tamil Nadu and Rajasthan, reversing their bans.|
IPL was the fillip.
The Indian Premier League, brought 20-over cricket to India in 2008.  A year later co-founders Harsh Jain and Bhavit Sheth launched the Dream 11 website and a free app.  It stuck to the format of fantasy games that had been around in the West since the end of World War Two in 1945:   participants pick real players and create virtual teams.  The real performance of these players is transformed into points in the fantasy game which determine if the gamer “wins” which usually means a cash reward. Participants are deadly serious: they study the players’ ‘form’ in detail and like team owners, they draft or drop players  to create  a balanced team.
Today Dream 11 leads the pack of Fantasy game platforms with 160 million  active users and has branched into other games including hockey, football,  basketball, volleyball, rugby,  baseball, American football and purely Indian sports like kabaddi.  A $ 8 billion company  by end 2022, Dream 11 and is now a Title Sponsor of the  IPL as well as  a partner of   ICC, the Pro-Kabaddi League,  New Zealand Cricket  and many other  sports organisation– a clear message that FS  has gone ‘legit’.
Cricket has remained the most popular fantasy sport – and other popular  platforms include MPL, MyFab11, My11 Circle, and PlayerzPot.Earlier this year Chennai Super Kings player Deepak Chahar debuted another cricket FS – Trade Fantasy Game --  and  last week the co-founder of  fintech company, BharatPe,  Ashneer Grover launched another cricket-oriented game app, Crickpe.
With the Women’s Premier League (WPL) making its debut last month, FS has brought quick recognition to some of its star players  -- and a  useful infusion of money into the  fledgling league.
The Deloitte study has some interesting data on the archetypical FS participant:  40% in the age group 25-34, followed by 35% (18-24) and 25 % (over 35).  Women make up 30% of the participants – but with the popularity of WPL, this number is set to grow.
Some 60% play fantasy football once in two weeks, outnumbering the 10% who play cricket games once a week.  Fantasy basketball and hockey attracts 10% of all participants who play twice a week. This challenges the t perception that fantasy sports is mostly about cricket
High tech skills
The Federation of Indian Fantasy Sports makes the case that being heavily product oriented, the industry is a catalyst   and an absorber for high tech skills – like Artificial Intelligence, Big Data, Cyber Security, Machine Learning, product management and Cloud -based technologies.
FSPs have been hiring from renowned institutes like the Indian Institutes of Technology (Bombay, Kharagpur, Kanpur, Delhi, Madras, Guwahati), the National Institute of Design, and the Indian School of Business.
Says the Deloitte study: “FS platforms exist within an ecosystem of several other sectors such as payment gateways, technology support, marketing, customer support, and many more. Hence, every job directly  created  by Fantasy Sports Platforms (FSPs)  creates a ripple effect, generating 1.5 times more indirect job opportunities in these ancillary sectors as well. In this manner, FSPs indirectly employed 7,500 professionals in the Fiscal Year 2022, and are expected to generate 10,500 indirect job opportunities by FY  2027.”
Many sports have had large infusions of funding, thanks to fantasy sports enablers: International Hockey since 2019, Pro Kabaddi for 2022-23,  Indian Volleyball leagues  in 2021 and 2022, among others  have benefitted. In 2021-22 alone FS companies provided Rs 3100 crores of support to sports bodies.
The study also reminds that in addition to spending money on league sponsorships, athletes, and media presence, leading FSPs have been allocating capital to start-ups that help build an ecosystem for sports in India. This makes FS  a key driver of development of the sports economy in India. “This is particularly integral for the development of sports beyond cricket, as is happening currently in sports such as kabaddi, hockey, and basketball”, says the study.
In this scenario, should the government look upon FS – and indeed all online gaming – merely as a milch cow, to be taxed for the maximum that the companies on one hand and the aam aadmi which participates, can be squeezed for? 
That is clearly the present scenario, where   net winnings  from online games platforms are subject to a 30%  'sin tax on par with lottery winnings which involve no skill at all. Thankfully, the last Union Budget clarified that such tax need be paid only at the end of the year and not after every win.  
With regard to GST on the FS companies, the prevailing mantra seems to be the Public Gambling Act of 1867 which prohibits gambling but excludes ‘games of skill’ from its ambit.   Even though the apex court has declared that fantasy sports in its present form is not gambling, betting or wagering, but demands skill, the GST Council according to current rules seems to have  fixed a flat 28%   on all forms of online games even though this slab is applicable only to so called games of chance. The FS industry seems resigned to this levy and is trying to negotiate the nitty gritty of what element of its earnings will be taxed.
In this seeming ‘let’s squeeze ‘em for all it’s worth’   policy, is the government killing a golden goose – shutting its eyes to the larger economic contributions of the FS industry as a generator of skilled jobs and the catalyst of a  broad ecosystem of  talent  and resource?    Hopefully some pragmatic  middle path will emerge.
Meanwhile the FS industry has welcomed the recent regulations governing the online gaming industry as a whole and government’s comparatively lighter touch, by way of  creating three Self Regulatory Organisations (SROs)  with participation of all stakeholders, to  approve and oversee the games.
FIFS Director General Joy Bhattacharjya, whose organization represents 35  fantasy sports companies, said:  “The notification...marks a pivotal moment for the online gaming industry in India. It is expected to put an end to the ambiguities that the industry was grappling with and lay the foundation for sustainable and responsible growth of the industry".
Roland Landers, CEO of the All India Gaming Federation (AIGF), quoted in Financial Express  earlier this month articulates  the  hopes and aspirations of this  new niche in online games: “The fantasy gaming sector offers fans a chance to get more involved and engaged in the gameplay and use their knowledge of the sport and its players to their benefit. Since India’s love for sports is not going away any time soon, we believe the momentum for fantasy gaming is also going to continue in the long run.”
This report has appeared in Swarajya