The Game Within
Business Today|March 07, 2021
Niti Aayog’s consultation paper on fantasy sports advocates self-regulation, but legal and regulatory uncertainties remain a drag for an industry that has the capacity to attract ₹10,000 crore FDI in the next few years
RUKMINI RAO

Gaming apps are not new to run-in with the legal system. Take the latest Kerala High Court notice to some celebrities for endorsing these apps, or a November 2020 Madras High Court notice to BCCI chief Saurav Ganguly and Indian cricket team captain Virat Kohli for endorsing fantasy apps. The Madras High Court notice was in response to a plea filed by an advocate after a youth killed himself as a result of losing money on these applications.

While law in India distinguishes between games based on skill and those based on chance, and prohibits the latter for stakes, in December 2020, government think-tank Niti Aayog released a draft discussion paper seeking comments on guiding principles

The aim is to bring regulatory clarity to a segment that has the potential to generate substantial business in years to come. The draft, among other things, has proposed the setting up of a self-regulatory governing body for industry players with an independent oversight board and customer redressal mechanism.

The industry, which believes that the right regulations can help fantasy sports attract ₹10,000 crore foreign direct investment and create as many as 10,000 jobs, should have been thrilled. But it was cautious. The reasons — the legal complexities involved and multiplicity of industry federations; ambiguity in some of the recommendations; and an industry divide between fantasy sport and other online gaming players with the latter saying that the regulations are undermining their interests.

Online Bet

Prime Minister Narendra Modi, in a meeting on the toy industry last year, called for tapping the potential of the gaming sector, largely dominated by international companies. A latest Deloitte report says the gaming industry can touch $2.8 billion by 2022, with real money gaming, fantasy sports and esports segments leading the growth.

A KPMG report, ‘Business of Fantasy Sports’, says number of users participating in online fantasy sports in India grew at a compounded annual growth rate of 212 per cent between June 2016 (two million) and December 2019 (90 million). It says revenues of the online fantasy sports players grew from ₹262 crore in FY18 to ₹924 crore in FY19 and ₹2,470 crore in FY20.

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