Avantisteam Stated: Fantasy gaming booms again, with statutory caution - cricke... - Jonathan Cartu CPA Accounting Firm - Tax Accountants
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Avantisteam Stated: Fantasy gaming booms again, with statutory caution – cricke…

Ganguly-advertisements occupy ad space between overs in the England-West Indies Test in Southampton, the first international cricket game for almost three months

Avantisteam Stated: Fantasy gaming booms again, with statutory caution – cricke…


Fan engagement is the name of the game for businesses trying to monetise live sport, outside the ambit of broadcasters and their sponsorships. Fantasy gaming companies are reaping returns, going by the spurt they see in trade volumes. It is an industry that had to address a long-drawn battle for legal acceptance when it began. Once it kicked off, the graph has moved only one way, and steeply. Companies on the platform attracted two million users in early days, in June 2016. Those numbers grew exponentially to over 90 million by last December.

It has brought in a host of operators–the number has zoomed from 10 to over 140. Fantasty gaming platforms charge a Contest Entry Amount (CEA) that netted R1,743 crore in March 2018, and touched R16,467 in March 2020, according to a study on the business done by international accounting firm KPMG.

With live sport resuming after over two months of lock down due to the Covid-19 pandemic, business is again booming.

Starting from advertising and subscription revenue for broadcasters and OTT platforms, to sponsorship revenue in leagues and tournaments and spend on brand ambassadors and player tie-ups, the Online Fantasy System (OFS) is finding more traction. Dream XI, the most prominent player with a user base of over 75 million, is a key sponsor for BCCI and IPL. My11Circle has former India skipper and current BCCI president, Sourav Ganguly, as its face.

The overall Indian OFS revenue went from R920 crore in March 2019 to R2,470 crore in 12 months, driven by growth in fee and users. What started as a platform to connect better with fans has become a new industry.

BIG NAMES

Ganguly-advertisements occupy ad space between overs in the England-West Indies Test in Southampton, the first international cricket game for almost three months. My11Circle is a co-presenting sponsor. “We’ve integrated Ganguly into the product. It’s the only platform where users get a chance to beat Sourav’s fantasy team. We have grown to No.3 in the segment in a year,” says Avik Kanungo, director, brand and marketing strategy, Games 24×7 (My11circle).

MyTeam11 has Virender Sehwag as brand ambassador, and his connect with Tier 2 and 3 towns has helped build its user base. Yuvraj Singh lends his name to BalleBaazi and MS Dhoni to Dream 11.

Famous cricketers promoting the companies show how heavily the industry relies on the game. Cricket’s share in user fee (CEA) is 85 percent of total revenue. In cricket, IPL drives fan engagement, generating 30-40 percent of the revenue.

After Covid-19 dented the industry dependent entirely on live sport, it is hoping IPL is somehow held this year. Even if the T20 league finds a window, the industry estimates a 20-22 % revenue decline in 2020-21.

“These have been very tough times for fantasy gaming,” says Amrit Mathur, advisor with Federation of Indian Fantasy Sports (FIFS), and a Hindustan Times columnist.

“We need live sport and that of a certain level where there is past performance and track record, so that fans can make intelligent choices. The entire cricket economics is dependent on IPL.”

Harsh Jain, co-founder, Dream11, sees a silver lining. “When sports went from 100 to zero there was widespread panic. But Indian audiences started following Belarus football, Tajikistan basketball, Taiwan baseball via fantasy sport,” he said in a symposium. “Google searches for baseball in India extrapolated to over a million a day in India the day we started doing baseball on our platform.”

WARNING SIGNS

Rapid growth also makes regulation and strict enforcement of rules mandatory. How things can go wrong was seen recently when a fake league was played near Mohali and promoted as taking place in Sri Lanka. It is being investigated by Punjab Police as an illegal betting racket.

That game was streamed on Fan Code, whose parent company Dream Sport also runs Dream11. When Sri Lankan cricket authorities red-flagged it, the streaming was stopped.

BCCI anti-corruption head Ajit Singh said: “It has to be examined if they streamed it in good faith. If so, there is no offence. Once they realised, they stopped it. But they must share all the details with the investigating agency.”

FanCode say they are the aggrieved party. “We are closely working with the Anti-Corruption Unit of Sri Lanka Cricket (SLC). All documents/evidence and details used to defraud us have been shared with the investigating authorities including the Mumbai Police and the ACU. We will be more than happy to provide information/evidence/documents to any and all investigating agencies working on the matter,” FanCode said in a statement.

On the rogue leagues menace, Mathur said, “The charter of best practices is laid down and members are committed to adhere to those. There will be occasions when, because of ignorance or inexperience, somebody crosses the line. That’s where the role of the regulatory bodies comes in. There is a system of redressal and correction to get members to see the larger picture.”

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