Fantasy gaming apps’ revenue jump to Rs 2,800 crore during IPL 2023 amid debate of chance and skill

According to Redseer’s analysis, the IPL season generated a gross gaming revenue of approximately Rs 2,800 crore, with a staggering 61 million users participating in fantasy gaming. This represents a 24% increase from the previous year’s revenue of Rs 2,250 crore, and the market has experienced a compound annual growth rate (CAGR) of 30% since IPL 2019.

“IPL is the most awaited sporting event, with fans across the country cheering for their favourite teams to take the coveted trophy home. The rush of live matches isn’t enough for the millions, so they take it to the fantasy league – a virtual game where the participants can create their own teams based on real-life players and virtual currency,” Redseer said in a report.

The analysis reveals that the IPL 2023 attracted a substantial number of new users, with 35% of them playing on fantasy gaming platforms for the first time. This influx of new users led to an 11% increase in cash users during the season, with an average spend of approximately Rs 127 per match per user.

“The top 3 platforms captured approximately 96% of the market share during the IPL 2023, and had an average revenue of Rs 458 per user for the season. The excitement of IPL also trickled into non-IPL sporting events during the season, contributing to ~13% of the revenue,” said Ujjwal Chaudhry, partner at Redseer.

The gross gaming revenue during weekdays was 1.3x compared with weekends and peaked during the final match played between Mahendra Singh Dhoni-led Chennai Super Kings and defending champions Gujarat Titans.Additionally, Redseer’s analysis revealed that Mega Tables, which represent the sum of the highest prize pool tables in each match across platforms, experienced a 30% decrease in size during weekends due to multiple matches being played simultaneously. However, Mega Tables boasted a higher rake rate of 24%, contributing 60% to the overall revenue during the season.Before the IPL, Redseer had projected that the gross gaming revenue from fantasy sports during the tournament would grow by approximately 30-35%, reaching Rs 2,900 to Rs 3,100 crore in 2023. The number of transacting users during the IPL season was expected to increase by 25-30%, with 60-65% of users coming from Tier-2 cities and beyond. Furthermore, the average revenue per user was predicted to rise to Rs 440 per user, up from Rs 410 in IPL 2022.

Redseer had earlier said the IPL market size is expected to have grown because of several factors, including increased awareness of fantasy gaming and new platforms increasing their marketing efforts.

Fantasy sports in India even till 2013-2014 was largely popular for English Premier League games, but the IPL body themselves had launched fantasy sports on their platform www.iplt20.com/fantasy later on. In recent years, there has been a spurt of such gaming apps promising to pay crores for each game to the winners.

Dream11 largely dominates the market and it is endorsed by cricket stars including the Indian team’s captain Rohit Sharma, Jasprit Bumrah, Hardik Pandya, among others, hile they continue plying trade on the ground. In fact, former BCCI President Sourav Ganguly endorses the fantasy app My11circle.

Recently, Dream11 secured a three-year contract to become a lead sponsor of India’s national cricket team, replacing Byju’s. Over the past five IPL seasons since 2019, fantasy gaming apps have witnessed an 18% compound annual growth rate in cash users, while the total market revenue has exceeded $1 billion, Reuters said citing industry estimates.

While many think of fantasy sport as nothing but betting, which is banned in India, the stakeholders cite it to be a game of skill quoting Article 19(1)(g) of the Indian Constitution. The Article says a game of skill where players must use their expertise, talent, knowledge, and strategies to analyse, think, and develop techniques to win is a legal activity.

Meanwhile, the gaming companies are also fretting over a likely hike in GST on them to the highest 28% bracket. The Goods and Services Tax (GST) Council is likely to meet on July 11, where they may discuss reports submitted by the group of ministers on online gaming, casinos and horse racing.

A group of top online gaming firms has sent a representation through the Ficci Gaming Committee to the Central Board of Indirect Taxes & Customs, urging no hike in GST from the 18% as suggested by ministers’ panel.

Proposing a 28% tax for gaming companies that are still focusing on building IP and technology would kill the companies in the sector that are building for tomorrow. It will lead to the demise of many smaller players and deter any new entrants with alternatives to foreign products and technology, Saumya Singh Rathore, a co-founder of gaming platform WinZO Games, had told ET Online.

Meanwhile, the government has taken a decision to certify “what is a permissible online game” until the self-regulatory organisation (SRO) is formed by the gaming industry, Rajeev Chandrasekhar, minister of state for electronics and IT (MeitY), had said.

In a previous interaction with ET Online, Redseer’s Chaudhry had said, “Encouragement from the government in the form of formalized rules and regulations regarding GST for RMG platforms and Google allowing fantasy platforms on the Google Play Store will further increase transacting users during IPL.”

Redseer’s analysis also revealed that a total of approximately Rs 10,000 crore was spent on advertisements, with the BCCI, franchises, and broadcasters earning 65% of the total spend as direct revenue. The remaining 35% constituted indirect revenue earned through ad revenue by social media platforms, traditional media, and other internet platforms.