FINANCE AND

INVESTMENT
CELL, SRCC

DECONSTRUCT
5.0

SPORTS
BETTING
INDUSTRY
 03 Sports Betting and what it is
ONTENTS

05 Evolution of sports betting

07 Revenue Structure

08 Legalities

11 Different Shareholders

16 Fantasy Sports

21 Moving forward, the future

industry
SPORTS BETTING AND WHAT IT IS
‘Yeh Main Kar Leta Hoon, Aap Dream 11 Pe Team Banao’. Everyone who watches the
Indian Premier League has certainly heard this bizarre tagline at least once. Most people
felt tempted to explore what Dream 11 was, and some even became avid users.

Sports betting is a Real Money Game (RMG), and just one subclassification under the
landscape of online sports gaming. It is essentially predicting sports outcomes and
placing a bet on the same. Most of the bets are placed on sports like football, boxing,
cricket, baseball and basketball. However, sports betting is inclusive, and not limited to
these. Non-athletic events such as horse racing and e-sports also come within the scope
of this ever-growing industry.

Sports betting in India is prevalent across large parts of the country. Owing to the
pandemic-fuelled expansion this industry had, it has now become an invisible giant. The
Indian sports betting industry is growing at an aggressive rate of 40% annually, and is
expected to be worth around $2.8 billion by the end of this year as per a report by
Deloitte. The US market earned $1 billion in revenue in 2020, and this figure is estimated
to grow six times by 2023, as reported by Forbes.

Though not explicitly legal, people are increasingly getting involved in sports betting.
While monetary factors continue to play the major driver of growth, there are
various psychological motivations behind the same. For a lot of people, gambling
isn’t about winning at all, they do it for the adrenaline rush. Despite their losses going up,
they keep coming back to the table.
A specialist in behavioural addictions at Nottingham Trent University listed a wide
range of motivations, apart from just winning, that bring gamblers back to this habit.
This includes the adrenaline rush a gambler gets while playing, even if they’re losing
money in the process.
A huge psychological factor at play is that losing money, in fact, boosts the positive
response to a win. The happiness derived from even a small win increases if this win
comes after a series of losses. The thrill here overpowers rationality. Another concept
at play here is mental accounting. Humans attach different values to the same
amount of money, depending on the predictability of that amount, and more
importantly, where it is coming from.
People are more likely to spend windfall gains, birthday gift-money or a year-end
bonus on (avoidable) luxury items, as opposed to spending their monthly salaries on
the same. Several other factors like the glamorous, glittery image of casinos, the
prospect of interacting with like-minded people, and the common perception that
betting helps make quick and easy money, have favoured the growth of this market.

A majority of bets in this industry are in the black market, and are facilitated by
underground bookies. This illegal betting revenue stands non-taxable currently, and

01
is a major loss of potential revenue for the government. Also, the presence of
middlemen like bookies, leads to corruption in games like cricket and football, with
instances of spot fixing and match fixing. While sports betting has been here for many
years, the negatives have come to light recently. With 45% of gambling now being online,
people have easier accessibility, increased privacy and overall higher convenience,
making them more susceptible to addiction.

Furthermore, there are multiple forms in which sports-betting can be observed. The oldest
form is possibly "winner takes all", where the victor gets all the bet money if they get a
favourable outcome. In contemporary times, odds-betting is probably the most popular
form of sports betting. In this system, the contestants are evaluated by a bookmaker and
the probability of victory is assessed. For example, with the odds of +300, for every $100,
a bettor would win $300. The odds of this event would be 33.33%.

For races such as those involving horses, dogs, camels and akin, and games like jai alai,
a pari-mutuel betting framework is employed. Before the contest begins, a calculating
machine (called a “totalizer” in horse racing) records the amount bet on each competitor.
This machine then determines the odds of the game, and the winning amount to be
awarded.

The third system of sports-betting, most commonly used in football and basketball
matches, is the point based spread system. A point spread is essentially a bet on the

02
the margin of victory- to win a bet, the favoured team must win by a certain number of
points. Conversely, the underdog team could lose by fewer than the same amount of
points, or outrightly win the bet. However, the most popularly emerging form of sports-
betting is Fantasy Sports. These can be small leagues among groups of friends, or full-
blown versions monitored by Internet-companies. Bettors select actual athletes for a
‘fantasy team’, where a bettor with the most well-performing athletes (in terms of selected
criteria) wins.

EVOLUTION OF SPORTS BETTING

Humans love to gamble and the evidence can be traced back to ancient China where
indications of rudimentary games of chance were discovered on tiles, or Egypt where the
oldest dice known to mankind was excavated. Greek and Roman pottery also show
scenes depicting animal breeding solely for the purpose of betting on animal fights.
Sports betting has existed for over 2000 years, while betting, in general, has a history that
goes back to before Christ. The first “Sports betting” took place in ancient Greece, in
a game that they created as the biggest betting extravaganza to date, i.e, the
Olympic games. The sports betting fashion soon spread to Rome, which is also
considered the first empire to consider sports betting legal. Romans brought the trend to
Britain, and horse racing gradually spread as a popular activity from the UK to all across
Europe.

Quite similar to the UK, new world countries like Canada, USA and New Zealand followed
suit. In the United States too, sports betting became famous through horse racing. But as
professional baseball rose to fame in 1876, traditional sports betting came to the
forefront. In 1931, gambling was legalised in the state of Nevada, specifically in its Las
Vegas casinos. However, in June 1991, the Senate Judiciary committee in America
declared sports gambling as a national problem and enacted the Professional and
Amateur Sports Protection Act (PASPA), also known as the Bradley Act. The Act
illegalized sports betting throughout America, exempting states of Oregon, Delaware,
Montana and Nevada. In May 2018, the US Supreme Court voted to strike down the
Bradley act and advised all the states to come up with their own laws to regulate sports
betting. Following this, many states have legalised sports betting. In states where people
still can’t gamble legally, they have turned to their mobile phones for the same.

SPORTS BETTING IN INDIA

The history of gambling in India dates back to the infamous tales of Mahabharata and
Ramayana, with gambling boards and dice as the popular gambling devices in the
ancient times.

However, it wasn’t until the 18th century that ‘sports betting’ came into play, when the
Europeans entered India and introduced the game of cricket. In 1720, cricket began to

03
catch on and gradually became
the betting sport of choice. The
following century saw major
horse racing events in India, and
sports betting grew rapidly out of
control. As a consequence, the
British introduced the Public
Gaming Act of 1867, outlawing
the operation of a gambling
house. Even after independence,
gambling was seen in a hostile
light and the act remained in
place.

Despite sports-betting in India

being mostly illegal, the market is
estimated to be as big as $150
billion. In India, the States have
the right to make laws on the
issue of gambling, with states like
Sikkim and Goa being the most
permissive, and others like
Telangana, Assam and Orissa
strictly prohibiting sports-betting.

With the COVID-19 pandemic,

people were forced to the four
walls of their homes, and the
accessibility to online forms of
sports-betting increased
substantially. As digital
entertainment became the only
source of entertainment, the
online gambling scenario
observed a massive positive
out-turn. As per industry data,
there has been a 21% increase
in online gaming during the
months of the lockdown.
Anton Rublievskyi, the CEO of
PMI stated that the online betting
platform, Parimatch, observed a
33% increase in its turnover
around the IPL.

04
 REVENUE STRUCTURE
In 2020, the global sports betting market was valued at USD 66.98 billion. This industry,
owing to the recent trends, is expected to expand at a CAGR of 10.1% in the forecast
period of 2021 to 2028 and reach USD 140.26 billion by 2028. (Source - Grand View
Research)

MARKET MARKET
2020: US CAGR 2028(E): US
$66.98B 10.1% 140.26B

Due to lockdowns, the online sports betting platform garnered more participation, as
users spared more time for their phones and laptops, thus conveniently making bets
online. The online segment accounted for the largest share of revenue in 2020, almost
over 50%, and is expected to steer the growth over the forecast period.

When it comes to regional overview, Europe leads the market, with the largest revenue
share, of over 35%. Most of the countries in this region have safety laws and regulations
for both offline as well online betting.

The Asia-Pacific region accounted for the second largest share. But this region is
expected to surpass Europe and account for almost half of the bets in the coming years.

05
The factors fuelling the growth here are:

Purchasing Power of the People

With an increase in the Purchasing Power of the citizens and an overall increase in the
disposable income, entertainment industries like the sports betting industries flourished.
More and more people were ready to bet on sports games and their bets increased in
value too.

Improvement in Technology
As technology developed, betting sites became more convenient and user-friendly. The
public found it easier to place bets with the technological advances betting companies
made.

A question then arises: How exactly do sports betting companies make money?
Every bookmaker uses certain mathematical strategies to make sure that they are taking
in more money than they have to pay out. Sports betting companies charge a
rake/margin or vigorish, all of which mean a commission to accept bets. Now this
commission is actually priced into the odds they set. One common misconception we all
have is that the point spread is the actual odds, representing the probability of the
outcome of each event. On the contrary, it is an estimate set by the company to ensure
that the betting is almost equally divided between the two sides. Sports betting
companies manipulate the odds while people are betting. If people are betting on one
side of the match only, then they try to change the odds to induce people to bet on the
other side. And the general public responds to the betting behaviour of others.

By doing this, the company ensures that they are paying the winners with their losers’
money. They shave six to eight percent from each side, and that is where they make the
money.

06
The goal is to make a small amount of money on every bet that comes in, and that is the
reason their profits are so volume driven.

The Indian industry in particular, is expected to rise exponentially. India possesses the
largest online sports audience in the Asia-Pacific region, with nearly 468 million unique
visitors in March 2021, according to latest data from Comscore.

In the last few years, games based on localised preferences have been developed. Teen
Patti, Indian Rummy, and Andar Bahar, are not local roundtable games anymore. The
CEO of ENV Media said that, “We have helped over 2000 Indian players open their
accounts at Indian casinos and more than ninety percent have tried one of these games.’
The Indian demographics combined with the booming technology and IT sector has been
pushing this industry to reach newer heights.

LEGALITIES
On the basis of legal status associated with Sports-betting, countries can be divided in
three major categories:

Countries where wagering on sporting events and tournaments is outrightly banned,

that is one cannot place bets on someone’s performance. Some examples being -
Brazil and Qatar.

Countries where sports betting is not banned outrightly. Rather, there exists a partial
ban accompanied with certain checks on these activities. In some countries, betting
may be allowed in some sports, but not all of them. Some examples being- Argentina,
India and Philippines.

Countries with no regulations as to sports-betting i.e. one can wager on all types of
sports. Some examples being- USA (Some states), Australia, Ghana, Mexico, South
Africa and UK.

07
 The USA has a long history of sports betting and its
legalisation. For a long time, Nevada and Oregon were All forms of sports-betting are completely legal and
the only states that witnessed legal gambling. regulated in France. Although, there is a very high
Currently, about 30 out of 50 American states have tax and many regulations which create a problem
legalised sports betting, including 18 states that allow for licensed gaming sites. In 2010, the French
wagering bets online. The government overturned the government passed the Gambling act which gave
PASPA act in 2018 and that led to an increase in the Regulatory Authority for Online Games (ARJEL), the
spread of sports wagering. Since then, some states that authority to regulate and control online betting in
have legalised sports betting are Arizona, New Jersey, France.
New York, Virginia, among many others. 3 states
including Alabama and California have left their
decision pending while almost 20 states still consider
sports betting illegal.

Gambling was quite a popular form of entertainment

in Brazil till 1941, after which the Criminal
Contravention Act outlawed all forms of gambling
except for horse racing bets and lotteries. In 1946, the
government revised their restrictions and put a
complete ban on gambling. Despite many discussions
held on this topic, very little to no change was
witnessed for years. However, a gradual shift can now The English Law has deemed gambling to be a
be seen as the legislation approved the bill to legalise legal activity since 1961. No wonder, within six
fixed odds sports betting in 2018. months of this legislation, 10000 betting shops
came up. All sports are legal to be wagered
upon across both betting parlours as well as
online. Such is the popularity of betting, that the
Gross Gambling Yield of the UK is upwards of
$20 Billion. The success and popularity of The
Premier League is largely responsible for this
trend.

08
 Qatar’s legal system partially draws from Islamic Law.
Thus, just like other middle-east nations, betting of all Despite being the birthplace of gambling, all forms of gambling have been
types is strictly prohibited. There exist high penalties for illegal in China since 1949. Only exceptions to this rule are the
those who engage in such activities as well as those administrative regions of Hong Kong and Macau, where sports gambling is
who organise them. However, online gambling in highly regulated and strictly limited. The only sport betting allowed legally
particular doesn’t seem much of a concern for Qatar is via the state-run China sports lottery which was setup in 1994. Even
authorities, online sports betting, though limited, though online betting is also available to the public, it is through regulated
continues in Qatar. The cases of frauds, mishappenings and limited government approved sites. The Chinese government also
and misappropriations are strictly dealt with. monitors online websites closely and shuts down the citizens’ access to
sportsbooks based outside China via “Great Firewall of China”. The
Gaming Inspection and Coordination Bureau (DICJ) is responsible for
legislating and overseeing the entire gambling industry of China.

As a sport enthusiast nation, in South

Korea, sports betting is legal on sports
like cycling, horse-racing, powerboat
racing, etc. However, there are certain
caveats to this. Most sports-betting
activities are allowed only through
state-run platforms- Sports Toto and
Sports Proto. They have technically
monopolised the online-betting scene
such that none of the funds are routed
through black markets. Consequently,
users argue that these platforms are
limited in scope and do not offer
betting experience in true sense.

India has legalised sports betting only on

horse racing. Except for that, the Public
Gambling Act of 1867 states that all forms
of gambling are illegal but individual
states are welcomed to make their own
laws. Hence, the sports betting industry in
the country mostly operates in the grey
area. However, the Information
Technology Act of 2000 does not specify
any rules for online sports betting and this
rule is widely exploited by people. The
Indian Premier League witnesses most of
the bets every year as the love for cricket
in India is unmatched. Other sports that
witness such betting in India are football,
basketball, badminton and tennis. Till
date, sports betting is considered illegal in
Betting for most, if not all all states except for Sikkim and
sports is legal in South Africa Meghalaya. In 2009, the Sikkim
since 1994. Again, one can government issued the Sikkim Online
place bets both online as well Gaming regulations rule which outlined
Betting across most sporting events has been
as in-person. However, just like the rules for online betting licences in the
legalised by Australia since 1980, the first being on-
other countries the South state.
track race. While there are some sports one cannot
African Government mandates
bet on, most professional sports are open to it.
the disclaimer of financial risk
However, at the same time, the Australian
inherent in each advertisement
government established a code of practice for
campaign of such companies.
industry players with regards to promotions and
advertisement to protect children. Australia’s sports
betting expenditure has crossed $1 Billion/yr.

09
 DIFFERENT SHAREHOLDERS

1.GOVERNMENT
India has a huge middle-class population. In fact, around 55% of our population works
day in and day out to earn somewhere between Rs. 8000-Rs. 12000 per month. At the
same time, we as Indians, are extremely passionate about sports. Especially, when it
comes to cricket, this passion has no bounds. It cuts across communities and binds us
together.

Thus, a huge middle-class population hoping to improve their lot by earning some
extra bucks coupled with a deep passion for sports, makes a huge sports-betting
market in India. Surveys indicate that over 40% of internet users in India like to
gamble online.

The sports betting industry in India is just shy of reaching the gigantic $100 B market size
mark. However, around 80% of this is still illegal i.e. outside the ambit of what the legal
machinery perceives to be valid/ lawful. Let’s understands how this works-

The basis of segmentation in terms of being deemed as legal or illegal by Indian law lies
in the classification of the sport/game as a “game of skill” versus “game of chance”. A
game of wits is primarily all those games where the results are determined in a large way
by the mental and physical skills of the players playing them, rather than stars aligning in
their favour. These games are where fantasy sports platforms operate. Supreme Court
defines them as those games where:

“Success depends principally upon the superior knowledge, training, attention,

experience and adroitness of the player.” It is also noted by the Supreme Court that a
Game of Skill will have a predominance of Skill Factor.

The principal legislation governing gambling in India is the Public Gambling Act, 1867
(PGA). The PGA criminalises the act of ‘gambling’ in a public forum and the keeping
of a ‘common gaming house’. The PGA, however, creates an important exception in
favour of games of skill, by stating that the provisions of the PGA shall [not] be held to
apply to any ‘game of mere skill’ wherever played.

10
Games of Chance are defined in a negative manner as being those games where the
results are independent of the control of parties involved in the game. Thus, they are in
the nature of a wager.

This is what is actually called ‘betting’ and is illegal and actually constitutes 80% of the
industry. The proportion of fantasy sports is obviously minuscule compared to this. The
government hasn’t made a concerted effort to regulate the activities of these betting
platforms. Some of the major reasons of these being unregulated are as follows -
Since, a large portion of betting still continues in black markets, which are outside
government purview, any attempts to curb the organised segment would not have
much effect since the activities shall continue unabated in black markets.
These platforms act as a huge tax revenue source for the government. The gains of
these platforms are taxed at flat 30%, which is huge given the growing potential of the
betting industry. Consequently, banning such platforms would mean doing away with
this revenue.

However, the government has also taken certains steps so that there are certain checks
on the power of these platforms. Some of these steps include-

1. No FDI is allowed by the government in this sector. Thus, clearly displaying a

discouraging attitude of the government towards this sector.
2. Government has mandated all such platforms to have a necessary disclaimer warning
to be given to potential users across advertisement campaigns, apprising them of the
financial risk involved in such activities.

Some states such as Assam, Sikkim, Nagaland, Odisha, Telangana, Karnataka and
Andhra Pradesh have even gone so far as to ban certain esports betting platforms,
displaying a clear commitment of non-allowance.

2.SPORTS BODIES & AUTHORITIES,

BROADCASTERS & MEDIA
Given the huge popularity that these fantasy sports platforms enjoy, they have, to an
extent, benefitted even sports bodies, tournament broadcasters and media. Since, these
platforms allow people with the ages 18-24 to bet on sports without it being illegal, it helps
broadcasters and sports authorities by increasing their viewer base as well as the hours

11
viewed per device. These games are fundamentally based on the actual performance of
the sportspersons which in turn, determines the result. Thus, audiences become glued to
their devices watching matches. This increased interest and engagement has benefitted
all stakeholders involved in sports content distribution-

Sports Authorities- With increased viewership for their respective leagues, these
authorities gain bargaining power and are in a better position to negotiate with title
sponsors for sponsorship rights. No wonder, the Indian Cricket Team Jersey bears
the name of ‘MPL’ while ‘Dream11’ was the title sponsor for IPL. These boards also
are able to sell the broadcasting rights at a higher price. We have witnessed how
heated bidding for these rights has become over the years. Sometimes, the sports
authorities may also demand a cut from the total money bet on the sport that they
deal in as an ‘integrity fee’. For example, NBA and MLB (Major League Basketball)
demand a 1% cut from these platforms. As this space grows and matures, it may not
be surprising to see Indian Bodies like BCCI, FIH etc. demand their share as well.

Broadcaster- With broadcasters generating huge viewership, they naturally attract a

lot of brands to advertise their products in the Ad-breaks. As a result, even a 20
seconds ad would cost crores of rupees. In fact, we have seen a lot of fantasy sports
platforms like Dream 11, My Circle 11, Betway etc. have huge ad run-times,
especially during tournaments like IPL, BBL and ICC tournaments. To put this idea in
number:- Star Sports earns upwards of Rs. 3600 Crores from Ad-revenues from IPL
alone. Same is the case for other broadcasters.

OTT Platforms- Off late, since a lot of these OTT platforms have begun offering live
match experience on their apps, they have witnessed increased subscriptions to their
platforms. Since a lot of people are commuting or in places where television is not
available, they have no option except to subscribe to these platforms such as Hotstar
and SonyLiv. In fact, Hotstar owns a large portion of its 46 million subscribers to IPL
and other ICC Tournaments, which actually helped it to become the best-performing
OTT Platform in India.

3.SPORTS BETTING COMPANIES

The sports betting industry has taken off in recent years and one of the most impacted
stakeholders would be sports betting companies. Most legally recognised companies that
carry out this sort of betting conduct their activities online, under the provisions of the

12
Public Gaming Act, 1867. According to one of the most reputed sites for betting
information in India, the most popular and trusted betting sites are 1XBet, ComeOn,
Dafabet, Betwinner, 22Bet, Bet365, and Betway, among many others.

Revenue
With an increase in online betting, these companies have taken over the betting industry.
The revenue of these companies has gone up substantially as the betting industry
flourished in India. With the massive size of Indian sports viewership, it is estimated that
every time the Indian national cricket team plays an ODI, an estimated USD 200 million is
placed as bets. Although according to research, only approximately 23 million of the India
population is financially capable of betting on sports, these figures are enough to bring in
revenue for these companies, and these numbers will only grow with an increase in the
purchasing power of the citizens.

Untapped market
The Indian Sports Betting Industry is largely untapped as a majority of betting is illegal
under the governing provisions. Due to its untouched nature, sports betting companies
see a lot of potential in the Indian market for the growth of the industry and a subsequent
increase in their profits. Regulation of this industry will help these betting companies
improve their revenues.

Scope of the industry

Betting companies have used technology to their advantage by making online betting
easy, accessible and user-friendly. Using aggressive marketing techniques, involving ads
that use phrases like “risk-free”, “no brainer”, and so on, has increased public confidence
in betting.
Sports betting companies have also found loopholes in the laws that govern sports
betting in India to broaden the horizon of this industry, leading to higher profits for these
companies.

4.USERS
Among online betting activities, sports betting takes the majority 40% share worldwide.
The users of sports betting sites contribute to this large number. In India, with a sports
audience of 464 million unique visitors, where 40% of these users engage in sports
betting activities, approximately 185 million viewers bet on sports.

According to a survey by Statista, 42% of men are avid watchers of sports and only a

13
15% of the female population accounts for avid watchers of sports. Another survey shows
the age category 35-44 years old watches the most sports.

These users bet on different types of sports from cricket, football, to field hockey. The
large number of bettors in India, makes them a major stakeholder in this industry.

Reasons for increase in sports betting user base:

Usage of phone
Smartphones, in recent times, have become much more accessible. The time spent by
users on their phone has increased substantially. This has led to an increase in usage of
applications, such as betting apps.

Cricket and Football

Sports like cricket and football have given a major boost to the betting industry as they
bring the most number of viewers, and hence the most number of bettors.

Legalisation of the industry

Betting is a grey area in India. Yet a lot of online betting sites operated from overseas
have become people. The base of bettors has also expanded in the past few years. The
large number of users might make the dream of legalisation of sports betting a reality.

Positive impact:
Source of income
Betting entails financial risk, but at the same time, has a lot of scope to make profits.
Sports betting, on a large or small scale, acts as a good source of income for the users.
Entertainment value
The risk factor and monetary value associated with betting increases the entertainment
value sports provides. With a direct impact of the game, bettors are more interested in the
sport.

Negative impact:
Loss in productivity of bettors
Betting may sometimes lead to addiction which may have harmful impacts on the users. It
may lead to wastage of time on betting activity, health problems, psychological problems,
and so on.
Financial loss
There is a large financial risk associated with betting. The uncertain nature of sports may
lead to large financial losses for the users, which may lead to bankruptcy or other
financial woes, and subsequently mental and psychological burden.

14
 FANTASY SPORTS
Prior to the emergence of fantasy sports, sports entertainment for fans was mostly
restricted to viewing the matches from their living homes or at times, stadiums. However,
fantasy sports have given the opportunity to the fans to be active participants in the
games, instead of a passive viewer, keeping them much more engrossed in the game
than ever before.

Fantasy sports are online prediction games wherein the users put together their virtual
team of real players of a professional sport such as Cricket, Football, BasketBall, etc. The
users making their own team are called ‘managers’ and form a team of players in a
specific league like IPL or a specific match like CSK vs MI. The managers earn fantasy
points on the basis of the real-life performance of the players in the sport. Each manager
plays against other managers on the platform. They manage their team by buying, selling
or trading the players.
There are broadly 2 main types of fantasy sports that are prevalent:
Season-Long: Picking players from for an entire season of the tournament and
managers earn points according to the performance of the players in the whole
season.
Daily: Picking players for a particular match of the tournament and managers earn
points on the basis of the performance of players in the day’s match. This is the
format mostly followed by platforms in India.

Basis of Score:
The points earned by the players differ from sport to sport, sometimes from one platform
to another. For example, with a total credit cap of 100, the user creates a team of 11
player from both the teams, with usually a maximum of 7 from one team, in case of
cricket and football, As for basketball, the user creates a team of 8, with a maximum of 5
per side. The player combinations and scoring systems for different sports are as follows:

1-4 Wicket-keepers, 3-6 Batters, 1-4 All-Rounders, 3-6 bowlers

Point(s) for: each run and boundary scored, wickets taken, catches taken,
run-outs done, milestones achieved like century, 5 wicket hauls etc. by the
players. Negative scoring as well, for example, if a player gets out for a
duck, batsman maintains a poor strike-rate, or a bowler has a high
CRICKET economy rate, etc.

1 goalkeeper, 3-5 defenders, 3-5 midfielders, 1-3 forwards.

Point(s) for: each goal scored by a player, goal assists/chances, tackles
won, goals saved etc. Negative scoring for yellow or red cards received,
own goals, goals conceded by the keeper/defender, or penalty missed.
FOOTBALL

15
 1-4 players of each category: Point guard, shooting guard, small forward,
power forward, centre.
Point(s) for: each point scored, rebounds, assists, steals/blocks, with a
negative scoring for turnovers.
BASKETBALL
Out of all the players chosen by the users, they can select a Captain and a Vice-Captain.
The captain earns 2x points, whereas the vice-captain earns 1.5x points.
Most platforms like Dream11 allow managers to enter the contests through an entry fee.
The entry fee of all the contest participants is pooled in together to decide the winning
amount. On the basis of the performance of the various teams, the managers i.e. the
users are ranked and their winnings are ultimately decided.

THE INDUSTRY

GLOBAL SCENARIO

VALUE Valued at US$ 20.36 billion in 2020, the global fantasy sports market
2020: US
$20.36 B is predicted to grow at a CAGR (Compounded Annual Growth Rate)
of 14.7% to $38.6 billion in 2025.

The main factors responsible for growth are:

CAGR
-Increasing youth population
14.7 -Increased penetration of the internet and smartphones, popularity of
%
sports
-Launch of multiple fantasy sports platforms and features.

VALUE
The largest market currently is North America. However, the Asia-
2028(E): US Pacific region is expected to be the fastest-growing market in the
$38.6 B
future.

INDIAN SCENARIO

India has a huge fan following for various sports. Cricket sits right at the top, which is
essentially next to religion here. Other sports like football, kabaddi, basketball (NBA) are
also gaining popularity. Online Fantasy Users in India (in Million)
100 90
The Indian Fantasy Sports industry witnessed
a major boost in 2016-17 due to increased 75 65
internet and smartphone penetration,
51
50
increased adoption of digital payments like
digital wallets and UPI, and cheaper data 25 20
rates. This can be supported with the 2
0
following facts: June '16 Dec '17 Dec '18 Mar '19 Dec '19

16
 Launch of new platforms. From less than 10 platforms before 2016 to over 140 by the
end of 2019.
Growth of user base from 2 million in 2016 to 90 million in 2019.

The Indian fantasy sports industry is expected to be worth US$ 3.7 billion by 2024,
creating a huge opportunity for new entrants.

After the inception of IPL in 2008, many other sports leagues have come up in India: Pro
Kabaddi League, Indian Super League (Football), Hockey India League, Ultimate Table
Tennis, Premier Badminton League, etc. With the help of sponsors, participation of
international players and celebrity endorsements, the viewership of sports leagues has
increased manifold. Due to increased traction, fantasy sports platforms have expanded to
include these leagues and enhance consumer engagement on their platforms.
Gross Revenue (INR CR.) CONTEST ENTRY AMOUNT (INR CR.)
2,500 20,000
2470
3X INCREASE 167% INCREASE
2,000 16467
15,000

1,500
10,000
1,000
924
5,000 6158
500
262 1743
0 0
FY18 FY19 FY20 FY18 FY19 FY20

Regulation
With the rapid increase of the industry in the past few years and the number of
stakeholders including both businesses and users, it was imperative to have a regulatory
body that would govern and keep a check on this industry. Founded in 2017, The
Federation of Indian Fantasy Sports (FIFS) is a self-regulatory body that aims at
protecting consumer interests and standardised practices for the scope of industry in
India. The FIFS has over 35 of the largest sports fantasy platforms as members catering
to 99% of the users.

Functions of FIFS:
Policy Advocacy:
Create opportunities to provide a forum for advocacy for the sports gaming
industry's issues, difficulties, and opportunities.
Serve as a way for state and central government representation.
Improve the industry's competitiveness by developing a consistent and
coordinated voice that can be conveyed to important stakeholders including
bureaucrats, legal advisers, influencers, media, etc.
Research and Information:
Conduct and publish reports on market trends and recent developments.
create outlets for members to exchange and trade information and expert
opinions on legal, operational, tax, etc. on a regular basis.

17
 Complaints and Redressals
Implementation of FairPlay policies and honest communication with the users to
address their grievances. For example: Sports-gaming operations, contest-related
problems, misleading advertisements, etc.

Viewership
Sports festivals like IPL serve as an opportunity for Fantasy sports platforms like Dream
11 to attract and retain the audience. During these festivals, Dream 11 enjoys a boom in
viewership. However, it becomes a challenge for the largest fantasy sports platform to
retain its viewership throughout the year. Dream 11 team has to send personalised
messages to its 30 million+ user base to prompt them to launch the app.
Dream11 uses cohort analysis to analyse various factors like customer retention rate,
type of viewers, average engagement time, etc.. to run various user-friendly campaigns in
order to impart value to the customers. Using this analysis, it was discovered that the
customers who participated in previous
2470 matches are also likely to participate in future
matches. Hence, it becomes important to tap such users in order to enhance viewership.
16467
In order to attract a new mob and to create a user-friendly environment, Dream 11 uses
flows to understand how users navigate through their app. Flows provide various insights
which are useful to adopt new features and identify friction points in their UX.

CASE STUDY-DREAM11
Largest online fantasy sports platform in India.
Over 12 crore users, 40 sports associations and leagues as official
partners and over 10,000 matches per year.
Title sponsor of the Indian Premier League in 2020.
Founders: Harsh Jain and Bhavit Seth
Headquarters: Mumbai, Maharashtra

2008 Dream11 was founded

2012 Pivoted to freemium fantasy sports

2015 3 lakh users

2016 15 lakh users

2017
57 lakh users; official partner of CPL; Harsha Bhogle
as Brand Ambassador

2018
1.7 cr. lakh users; official partner of NBA, BBL, ICC, ISL, Pro
Kabaddi League, MS Dhoni as brand ambassador
5.4 cr. users, official partner of IPL, LaLiga, Rohit Sharma as
2019
brand ambassador
10 cr. users, title sponsor of IPL for a whopping ₹220+ cr.,
2020
added baseball, rugby, NFL, futsal to its platform.

18
WHAT MADE DREAM11 the most successful fantasy sports platform?
Dream11 User Base
Associations with sports leagues 125,000,000
around the world including IPL, ICC,
LaLiga, CPL T20, NZ cricket, T10 100,000,000
league etc.
Excellent marketing strategies: 75,000,000

Different ad campaigns run by

Dream11 such as ‘Khelo dimaag se’, 50,000,000

‘Yeh game hai mahaan’, ‘Game hai

25,000,000
toh mazza hai’ showing cricketers
like Rohit Sharma, etc. playing gully
0
cricket and running them 2015 2016 2017 2018 2019 2020 2021
them aggressively across TV, social media, especially during IPL appealed to the
fffffffsentiment of the users and helped
2470it gain popularity.

Best choices of Brand ambassadors: Roping in of MS Dhoni, Rishabh Pant, Shreyas16467

Iyer, Rohit Sharma, and many more domestic and international players.
The brand's social media platforms are very active, and they feature their top players
who have won first prizes worth millions of rupees. They also congratulate winners at
a post-match presentation ceremony, which raises customer expectations and
engagement.
Even with the presence of so many other players in the fantasy sports arena, the right
choices made by Dream11 helped it achieve a dominant position over others and the first
choice for users.

FANTASY SPORTS YEAR

SPORTS OFFERED USER BASE
PLATFORM STARTED

Cricket, Basketball, Football,

2008 Kabaddi, Hockey, Volleyball, 120 million+
Baseball, Handball

Cricket, Basketball, Football,

2016 Kabaddi, Hockey, Volleyball, 18 million+
Baseball, Handball, Rugby

2019 Cricket, Football 17 million+

2016 Cricket, Football, Kabaddi 10 million+

19
 MOVING FORWARD, THE FUTURE
INDUSTRY
Drawing allusion from the ancient epics like Mahabharata to current rising trends in the
betting industry in the markets across the world ; playing cards for recreation to use of
skills in order to make money out of uncertainty in sports; betting with friends on a pity
event for a toffee to a more professionalised one involving lakhs of rupees; it is quite
evident that betting is a natural human instinct that tries to materialise itself in one way or
another. Thus, betting, especially in industries like sports where tides can turn anytime,
carries a huge potential.

Due to factors like advancement in the technology, a sudden shift towards the use of
online platforms, legalisation of sports betting in many countries and higher trust of
gamblers paying online, this industry2470
has registered a tremendous growth in the past few
years. As per a data report published by Statista, the market size of online gambling in
16467
2018 was roughly around 59 billion USD. It is anticipated that the industry will register a
two fold growth in a span of few years and is projected to be valued at more than 92.9
billion U.S. dollars in 2023 spanning across the globe.

Many European countries were involved in the trait of online gambling much before the
US. But as said, “ When the US sneezes, the rest of the world catches cold.” This
industry gained momentum after the landmark judgement passed by the Supreme Court
of US in 2018 which legalised online sports betting. The increasing trends of market
capitalisation and revenue generation observed after the enactment of this legislation are
enough to prove that this industry is a boon and holds a huge potential.

The introduction of new technologies have also paved the way forward .Nowadays,
professional gamblers use technologies like AI and Machine Learning to develop and use
algorithms that can predict results with a standard level of accuracy. This helps gamblers
to spread their risk and bet on multiple matches thereby, earning a constant revenue.
Micro betting i.e. betting on individual moments of a match irrespective of the final result,
goes hand in hand with the availability of technology that handles the real time odds
quickly on various sportsbook platforms. On a darker shade, gamblers use blockchain
technology and crypto currency to make payments to the online sportsbooks, especially
in the countries where sports betting is prohibited.

Indian Scenario:
Reports suggest that, in India, the industry has registered an annual growth rate of 40%
and will be worth about $2.8 billion by the end of 2022. However, Sports betting involves
multiple dimensions which makes it quite ambiguous.. As previously discussed, Betting
and Gambling is a subject of state list and different states have different legislations for
the same. These ambiguous laws limit the potential of sports betting industries in our
country. .There is a dearth of trustworthy betting platforms and huge loss of revenue in

20
the form of taxes to the state governments. Realising the need of the hour, politician
Shashi Tharoor has introduced ‘Online Gaming and Prevention of Fraud’ bill in the
parliament to rule out this ambiguity and legalise sports betting in India.

As per current scenario, we observe that it is quite difficult for people to resist their
passive involvement in sports bythe way of betting. It is always better for the government
to collect the revenue from this industry rather than letting it go off in the hands of the
parallel economy. For people who allege that betting and gambling are unethical, this
argumentation is a one stop answer to them.

CONTRIBUTORS: 2470

16467

HARSHITA CHANDAK

KARISHMA SEWAL

KASHISH BANSAL

KRISHIV AGRAWAL

MRITUNJAY MENARIA

PRANAV GARG

SUHANI JAIN

21