The evolving
landscape ofsports gaming
in India

March 2019

KPMG.com/inTable of contents
The fantasy

sports market
in India05
Understanding the
An overview of

online gaming
in India01

fantasy sports
consumer

13

Sports betting
in India21
The e-sports
market in India

31

01

An overview of
online gaming
in India

The evolving landscape of sports gaming in India

The online gaming market in India has seen
tremendous growth of late, driven, in part, by thesurge in digital usage. The revenues have nearly
doubled over a period of four years, reaching
INR43.8 billion in FY18 and are expected to growfurther at a CAGR of 22.1 per cent from FY18-23,
expected to reach INR118.8 billion.01 The increasein online gaming activity driven by the growthin the number of gamers by nearly ten times over
2010-2018, also led to similar growth in gamedeveloping companies over the same period.
The proliferation of affordable smartphones,
high-speed internet and falling data prices are
the primary catalysts for this rapid growth.

Online gaming industry revenue*(INR Bn)

Share of revenues in online gaming

02

118.8

Others
11%

2017

43.8

20.3

Mobile
games
89%

FY14

FY18

FY23

Source: ‘Media ecosystems - The walls fall down’, KPMG in India, 2018

Source: Newzoo Consumer Insights02*Note: Revenue category - Mobile gaming, PC and consoles (excluding sales of physical
video games) and browser based games

Number of gamersin India03 (Mn)

Number of gamedeveloping companies
in India04

20

250

25

250

2010

2018

2010

2018

Source: From rummy to e-sports, itsboom time for digital gaming in India,
Techcircle, November 2018; accessedon 6 February 201901. Media Ecosystems: The walls fall down, KPMG in India’s Media and Entertainment
Report, 201802. The India opportunity: tapping into one-tenth of the world’s gamers, Newzoo, April 2018;
accessed on 7 February, 2019

Source: How digital gaming in India is
growing up into a billion-dollar market,
Forbes, March 2018; accessed on
11 February 201903. From rummy to e-sports, its boom time for digital gaming in India, Techcircle, November
2018; accessed on 6 February, 201904. How digital gaming in India is growing up into a billion-dollar market, Forbes, March 2018;
accessed on 11 February, 2019

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

03

In terms of popular gaming genres, puzzle, action and adventure are the most consumed among casual andheavy gamers. Also, mobile phones are the most preferred device amongst online gamers owing to theflexibility they offer in terms of the potential ‘anytime, anywhere’ usage.

Device preference

31%

22%

PC/Laptop

4%

11%

18%

34%

37%
23%

40%

Tablets

26%

49%
30%

37%

54%

Top mobile game genres

Mobile85%
PuzzleAction Adventure Arcade

Heavy

Racing

SportsCasualSource: Online gaming in India: Reaching a new pinnacle, Study by KPMG India and Google, May 2017

© 20182019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

04

The three key segments of online gaming are – real money games (RMG), mobile-centric/casual games ande-sports. Within the RMG genre, the further sub classifications include rummy, poker, daily fantasy sports
and quizzing.

Real Money
Games
(RMG)

OnlinegamingDaily Fantasy,
Rummy, Poker,
Quizzing, etc

Mobilecentric/
casualgaminge-Sports

Candy crush,
Subway surfers,
Temple run, etc.

Counterstrike,FIFA, PUBG, etc.

This report delves deeper
into two segments of
online gaming: e-sports
and particularly fantasy
sports. We discuss themarket for e-sports in India
and the growth drivers
and challenges, while forfantasy sports, we aim tounderstand the dynamics
behind engagement ofusers with fantasy sports
platforms, as well as tounderstand how fantasy
sports is vastly different
from sports betting.

© 20182019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

05

The fantasy
sports market
in India

The evolving landscape of sports gaming in India

06

Fantasy sports - market overview
Online fantasy sports gaming (OFSG) is a form ofskill-based online sports gaming where sports fanscan create their own team made up of real-life players
from upcoming matches and is widely played acrosscricket, football, kabaddi, basketball and other popularsports games. These virtual teams garner points
based on the actual statistical performance of players
during the course of the real life match and winners are
determined accordingly. The Punjab and Haryana High
Court has ruled positively on Dream11’s fantasy sports
game which follows the below format:

Users can play in ‘practice contests’ that are free
to join, or in ‘cash contests’ requiring an entry fee
and which offer monetary returns. Fantasy sports
has witnessed a rapid evolution from a great fan
engagement tool to a major segment of the online
sports gaming universe in India.

Fantasy sports users in India (Mn)a. Participants have to choose a team consisting of
the same number of players as the real-life sports
team (e.g. five in basketball, seven in kabaddi andeleven in cricket/football)b. The fantasy sports team needs to have a mix ofplayers from both the participating real-life
sports teamsc. All fantasy sports contests should run for at least
the duration of one full sports match
d. No team changes are allowed by participants after
the start of the sports match.

100

50+
20
2
June
2016

December
2017

February
2019

2020E

Source: Fantasy sports to have 100 million users in India by 2019, the journey has justbegun, Financial Express, June 2018; accessed on 1 February 2019

Some of the key reasons for this rapid adoption of
fantasy sports include:

Emergence of sports leagues
The fantasy sports landscape in India has witnessed a
The advent of multiple sporting leagues in India oversignificant transformation since its launch nearly two
the last few years (e.g. football, kabaddi, badminton,
decades ago. ESPN-Star Sports launched its ‘Superbasketball and volleyball) has increased opportunities
Selector fantasy game’ in 2001, which was amongst
for users to engage in fantasy sports. While thethe earliest fantasy games in the country to gain user
Indian Premier League (IPL) remains the prime sports
traction. The format of the game involved people
property in India, both from a sporting as well as aregistering their teams for free, with contest duration
fantasy sports point of view, the emergence of theseranging from a month to a specific series. Over the
new leagues ensures that users can engage withyears, other popular tournaments such as English
multiple sports throughout the year. The regional/
Premier League, UEFA Champions League, ICC
events, and IPL, developed games where people could geography based team structures of most of the
new leagues, coupled with the presence of national
manage their teams for specific tournaments.
and international stars, ensures a keen following ofIn the last 2-3 years, OFSG in India has witnessed
these leagues on fantasy sports platforms as well.
stupendous growth. The number of fantasy sports
Some of these new popular sports leagues launched
operators has increased by seven times (~7x) overin India are:2016-2018, whereas the number of users has grownby over twenty five times (~25x) from June 2016
Year ofto Feb 2019.01 A majority of the
LeagueSport
incorporation
fantasy sports platforms offer a
Fantasy sports
Indian Super League
Football2014
single-match ‘Free to play’ or ‘Pay
operators inPro
KabaddiLeagueKabaddi2014
to Play’ model of daily fantasy
India (Nos.)
sports. The daily fantasy
Pro Wrestling League
Wrestling
2015
sports format is highly sticky
Hockey India League
Hockey2013
and offers sports fans a
Pro Volleyball League
Volleyball
2019
2016
2018
meaningful way to engage
Source: Fantasy sports
Source: KPMG in India analysis, 2019
deeper with theirto have 100 million users
favourite sports.
in India by 2019, the1070journey has just begun,
Financial Express,
June 2018; accessedon 1 February 201901. Fantasy sports to have 100 million users in India by 2019, the journey has just begun,
Financial Express, June 2018; accessed on 1 February, 2019

© 20182019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a
Swiss entity. All rights reserved

07

Growth in digital infrastructure

Increased investor interest

Over the last two years, the number of internet
subscribers has grown from 368 million in
September 2016 to 560 million in September 2018,of which 86 per cent were broadband subscribers.
Also, during the same period, average data usage
per subscriber increased significantly due to theavailability of affordable smartphones/smart featurephones coupled with rapidly falling data costs.

The rapid growth of fantasy sports in India has been
well supported by continued investor interest insome of the leading players in the market. Someof the recent key investments in the fantasy sports
segment are outlined below. Also, others players
like DailyFantasy Cricket and CricNWin have raisedfunding of less than USD4 million.02

This growth in digital infrastructure has led to theavailability of high speed internet in the hands ofthe Indian masses, helping drive growth in fantasy
sports. The option of playing the sport on a handheld
device and at any given point irrespective of
location and time has significantly helped the user
engagement around fantasy sports.

Year

PlayerDeal

2019

RooterRaised INR10 Mn from early-stage
venture capital firm Anthill Ventures03

2018

Dream11

Raised USD100 Mn in a Series
D funding round led by Chinese
multinational investment holding
conglomerate Tencent04

2018

FanFight

Hyderabad-based Head InfoTech
acquired a majority stake in platform
and invested USD1 million05

Internet subscribers in India (Mn)
86%
76%
52%

368

Halaplay560

429

September
2017

September
2018

Nazara Technologies and Kae Capitalacquired 32 per cent stake through
USD0.5 Mn seed funding07

2017

2016

September
2016

Raised USD5 Mn in Series A funding
led by Nazara Technologies and Kae
Capital06

2018

Fantain Sports

BookMyShow acquired majority
stake08

Source: KPMG in India analysis, 2019

% of broadband subscribers
Source: TRAI performance indicator report, Sept 2018

Average data usage/subscriber/month
(GB)
8.32

0.24

1.6

September
2016

September
2017

Source: TRAI performance indicator report, Sept 2018

September
2018

02. Dream11 emerges from a legal wrangle to build India’s leading fantasy sports platform,
Your Story, October 2018; accessed on 6 February, 201903. How this start up is looking to leverage Cricket World Cup 2019 to accelerate growth,
Financial Express, January 2019; accessed on 4 February, 201904. Tencent pours in $100 mn in Dream11 at valuation of $500 mn, Entrackr, September
2018; accessed on 6 February, 201905. Head Infotech acquires majority stake & invests $1 million in FanFight, Economic
Times, March 2018; accessed on 4 February, 201906. Halaplay Technologies, Crunchbase; accessed on 30 January, 201907. Halaplay Technologies, Venture Intelligence; accessed on 30 January, 201908. BookMyShow acquires majority stake in Fantain sports, VC Circle, March 2016;
accessed on 29 January, 2019

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

Reaffirmation around the legality offantasy sports

There are two models of fantasy sports games
offered by these players

The ruling by the High Court of Punjab and Haryana09
and subsequent affirmation by the Hon’ble Supreme
Court on Dream11’s format of fantasy sports10 as agame of skill rather than chance has helped spreadawareness about the legality of fantasy sports andencouraged the participation of more users. At
the same time, fantasy sports operators have also
started promoting their product intensively andmaking conscious efforts to maintain the credibilityof their website/app by partnering with official
sports leagues. The ‘Khelo Dimaag Se’ campaign byDream11 was aimed at reaffirming the skill based
nature of fantasy sports.

• Free to play – Users play free contests, which may

Key partnerships of fantasy sports
platforms with sports leagues
Some of the prominent players in this segment
such as Dream11, MyTeam11, Halaplay, 11Wickets,
Starpick and Fantain have also partnered with official
sports leagues as their fantasy sports game partner.
Dream11, the leader in this segment with 90 per centof the total market share11, is the Official Fantasy
Game Partner of the International Council of Cricket(ICC), VIVO Pro Kabaddi League (PKL), Hero Indian
Super League (ISL), National Basketball Association(NBA), Hero Caribbean Premier League (CPL),
International Hockey Federation (FIH) and Big Bash
League (BBL)12. MyTeam11 has partnered with Pro
Volleyball League (PVL) and Pakistan Super League(PSL)13. Apart from these operators, prominent
leagues like Indian Premier League (IPL) run theirown official fantasy leagues.

Share in fantasy sports market of India08

or may not have cash prizes associated with them

• Pay to play – Users pay an entry fee to participate

in paid contests. Operators charge a service/platform fee of 15-25 per cent14 from the total pool
before winnings disbursal.

However, most of the contests are still on a ‘Free toplay’ basis as nearly 85 per cent of Dream11’s total
user base plays for free.15 Other revenue streams
for platforms could include advertisements, contest
sponsorships and brand partnerships.
Most of the popular sports like cricket, football,basketball, kabaddi are available on fantasy sports
platforms. For Dream11, cricket is the most popularsport on its platform constituting approximately 85
per cent of its user base16, but this has reduced overthe last three years as other sports gained traction
with emergence of new leagues in India. All of theseplatforms provide contests on a daily format only
apart from Dream11 which has recently introduced
the season long league format as well.17

Share of cricket as a sport in the Dream11
user base

95%

85%

2015

2018

Source: Dream11: How a fantasy gaming app became a brand, Afaqs!, January 2019;
accessed on 28 January 2019

Others10%

Dream1190%

Source: From rummy to e-sports, its boom time for digital gaming in India, Techcircle,
November 2018; accessed on 29 January, 201909. Shri Varun Gumber v. UT of Chandigarh and ORS, Casemine, accessed on
8 February, 201910. SC rejects appeal to initiate criminal action against Dream11, Glaws, March 2018,
accessed on 26 February 201911. From rummy to e-sports, its boom time for digital gaming in India, Techcircle,
November 2018; accessed on 29 January, 201912. Dream11 website; accessed on 26 February, 201913. MyTeam11 website; accessed on 26 February, 201914. Based on industry discussions
15. Dream11: How a fantasy gaming app became a brand, Afaqs!, January 2019;
accessed on 28 January, 201916. Based on industry discussions
17. Dream11: How a fantasy gaming app became a brand, Afaqs!, January 2019;
accessed on 28 January, 2019

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

09Market landscape of fantasy sports in India
Key investors

Sports available
on platform

FormatBusiness model

Kalaari Capital, Think
Investments, Multiples
Alternate AssetManagement, Tencent

Cricket, kabaddi, NBA,
football, hockey

Daily and season
long contests

Freemium-

Cricket, football, kabaddi

Daily

Freemium

Kae Capital, Nazara
Games

Cricket, football, kabaddi

Daily

Only paid-

Cricket, football

Daily

Only paid

BookMyShow

Cricket, football, kabaddi

Daily

FreemiumAngel Investors

Football, basketball,cricket, tennis, kabaddi

Daily

Freemium

Player (Year Est.)
Dream11(2008)

MyTeam11(2017)

Halaplay(2017)

11Wickets(2018)

Fantain(2013)

Starpick(2018)

Source: KPMG in India analysis, 2019In terms of total registered user base on a fantasy sports platform, Dream11 is the market leader with 50
million registered users. Its’ user base has grown at a CAGR of ~230 per cent over a period of three years.

User base of key players - 2018 (Mn)

Growth in user base of Dream11 (Mn)
50.0

50

10
1

1.2

Fantain

Starpick

17.0

10

5.7
1.3

11
My
Dream11*
Wickets Team11

Source: Company websites*: Dream11 base as on Feb 2019’

2015

2016

2017

Feb-19Source: Dream11 investor presentation© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

10

Network effects around fantasy sports – spawning a whole ecosystem

Higher sports
engagement
Increase inviewership
Increase ofinvestmentin sports
Increase ofinvestmentin sports
infrastructureand sports
persons

Growth insupporting
infrastructure

Fantasy
sportsIncrease inanalytics websites

Growth for digital
payment platforms

Proliferation of
discussion
forums andYouTubetutorial

Increase in revenue foronline payment platforms
and government

Higher fan engagement
The rise of online fantasy sports gaming in India has
not only increased the interest of users in sports but
also spawned a whole ecosystem around it. Most
importantly, the emergence of fantasy sports isdriving a deeper connection between sports fansand real life sports and fantasy sports has converted
many casual sports viewers into dedicated fans. As

an example, there have been studies that show thatin the United States, when a sports user evolves
into a fantasy sport user, he or she consumes 80
percent more sports.18 Therefore, by increasing theconnection between the live sporting action andfantasy game, fantasy sports helps increase user
engagement, which in turn facilitates increased
sports consumption.

18. Fantasy sports to have 100 million users in India by 2019, the journey has just begun,
Financial Express, June 2018; accessed on 1 February, 2019

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

11

Growth in supporting infrastructure
An important aspect in bridging the gap between
real sports and fantasy sports has been technology.
Fantasy sports operators have been increasingly
using new technologies to amplify the productoffering and to enhance real time fan engagement.
The industry has seen a growth in terms of numberof technology providers that provide analytics
services to the user and the operator. For example,
Dream11 has partnered with CleverTap whose cohort
analysis feature allows Dream11 to get a deeper
understanding of how its users engage with theapp19. Also, there are a number of advisory videos
platforms which have mushroomed on YouTube
overtime providing users with gaming tips and theirpredictions on team selection. The key revenue
stream for these platforms is ad-income.

Growth for digital payment platforms
On the transaction front, online payments companies
stand to benefit as fantasy sports only allows digital
payments, thereby helping increase transparency
and traceability of funds. Along with facilitating
legal monetary transaction which can be monitored,
fantasy sports act as a revenue stream for theGovernment through tax income and GST (levied at
18 per cent of operator gross revenue after deducting
the prize pool) generated from users and platforms.

Contribution to sports development

fantasy games, growth in one drives growth in theother and vice versa, thereby creating a “virtuous
circle”. There are several sports leagues whocurrently benefit from direct sponsor or partnershiparrangements with fantasy sports operators.
In addition, CSR monies from such operators are also
helping the development of non-recognised sports.
By way of example, under the recently launchedStars of Tomorrow (SOT) programme, The IndianFederation of Sports Gaming (IFSG) in association
with Dream11 Foundation, GoSports Foundation andFantain, is providing financial and other assistanceto athletes in the age group of 14 to 21 across non
mainstream sports like sailing, squash, golf andswimming, helping them transition from junior tosenior level athletes.

Efforts towards self-regulation
Fantasy sports, though a nascent industry inIndia has been taking necessary steps to achieveself-regulation through its industry body – IndianFederation of Sports Gaming (IFSG). Formed in 2017,IFSG is a self-regulatory industry body that protects
consumer interest and creates standardised bestpractices in the sports gaming industry.
Thus, growth in fantasy sports and its related
ecosystem is helping drive the growth of a sports
culture in India and helping increase the investment
towards sports; in a completely legal way.

Investment in talent and infrastructure is the key
criterion for fuelling growth in any sport. With anincreasing link between multiple sports and related

Fantasy sports – chance or skil ?
The legitimacy of fantasy sports and the resultant
demarcation between games of chance and skill has
often come into question. However, recent case laws
have established fantasy sports as a game of skill ascompared to illegal activities such as sports betting
which are games of chance.
A game of skill can be defined as any game orcontest in which the designating element of theoutcome is the judgment, skill or adroitness ofthe participant in the contest rather than purechance20. Such type of games encourage the user
to understand, experience and analyse aspects
related to the game.

Predominance of skill
Fantasy sports as a game requires the user to selecta team based on the application of their knowledgeof the particular the sport and involves player
performance analysis. The results are dependent
on the performances of each individual player
rather than of a single player thereby reducing the
likelihood of luck. Thus, it requires users to havean understanding of the game and a judgement of
selected players’ performance over the others.

19. Fantasy sports platform Dream11 retains 5x more customers with advanced user
insights, CleverTap; accessed on 31 January, 201920. 24 F. 3d 56 - Wedges/ledges of California Inc v. City of Phoenix Arizona, OpenJurist,
May 1994, accessed on 26 February, 2019

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

Even though every fantasy sports game has anelement of chance or luck considering that luck plays
a part in the real life performance of players, it is not
the determining factor in the success or failure ofa user’s fantasy sports team. Thus, fantasy sports
would be classified as a game of ‘mere skill’. Also,
there are various elements which are intrinsic to thegame format which require skill rather than chance
to win the game. For example, some features liketeam selection with the same number of players as
in real life team sport, a restriction on the numberof players that can be selected from each team, thecontinuation of the game for at least the durationof the relevant match in real time, an upper limiton spends to select the team and prohibition fromchanging the team structure after the start of thereal time sports match ensures the predominance ofelement of skill in the game.

Court rulings around fantasy sports
There have been numerous debates around the legal
status of fantasy sports and their classification as a‘game of skill’. As per the Indian legal system, fantasy
sports and sports betting or gambling activities aredifferentiated on the basis of the predominance of‘skill’ or ‘luck’.

12

not amount to gambling. The Court held that ‘theelement of skill’ had a predominant influence on theoutcome of the game under consideration, which had
the following format:• Participants have to choose a team consisting of

the same number of players as the real-life sports
team (e.g. five in basketball, seven in kabaddi andeleven in cricket/football etc.)• The fantasy sports team needs to have a mix ofplayers from both the participating real-life sports
teams• All contests are run for at least the duration of therelevant real-life match• No team changes are allowed by participants after

the start of the relevant real-life match.

On the above basis, the Court adjudged that theabove format, as offered by Dream11, constitutes a‘game of mere skill’, and that Dream11 is a legitimate
business activity protected under Article 19(1)(g) of
the Constitution of India22.
Later, an appeal against the Punjab & Haryana High
Court’s decision was filed which was subsequently
dismissed through an order of the Hon’ble Supreme
Court.

Also, in the recent ruling of the High Court of Punjab
and Haryana in the case of ‘Shri Varun Gumber vs.
Union Territory of Chandigarh and others’ in 201721,
it was held that playing fantasy sports of the typeunder consideration in the case (i.e. a Dream11game) involved a substantial degree of skill and did

This clarification of the legal status of the above
fantasy sports format has helped boost the overall
fantasy sports market in terms of a larger number ofplatforms entering the market with similar formats
and also leading to widespread user adoption.

21. Shri Varun Gumber v. UT of Chandigarh and ORS, Casemine, accessed on 8 February,
2019

22. Legal Framework, Gambling and Sports betting including cricket in India, Law
Commission of India, July 2018

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved13

Understanding
the fantasy sports
consumer

The evolving landscape of sports gaming in India

For the purpose of this study, a dipstick survey wascommissioned to understand the fantasy sports
consumer who has engaged with such platforms
over the last year and gain the following key insights
across demographic profiles:• Frequency of engagement of the users• Motivations for engaging in fantasy sports

14

The survey was conducted taking into accountonly consumers who had played fantasy sports inthe last 12 months, with the sample sourced from
regular users of online sports fantasy games as wellas professionals who regularly engage in fantasy
sports. The overall number of respondents were 336,
with the key findings of the survey outlined in thefollowing section.

• Is fantasy sports similar to sports betting, andthe factors determining such perceptions• User behaviour around free vs. paid gamingon fantasy sport platforms• Modes of engagement and dominant sports

played on platforms• Recall of major fantasy sports platforms andnon-monetary reward expectations from them.

Summary of key Insights from the survey
74% of the

respondents
play fantasy
sports 1-3
times a week,with themajority
playing
once aweek

54% of the
respondents
play fantasy
sports forfree
46% of the respondents haveplayed paid contests atleast
once in the last 12 months

60% of respondents

71% of the
85% of all
respondents
played fantasy
games onmobile apps

72% of the respondents
consider ‘Fun and excitement’as the primary motivator forengagingwith fantasy
sportsplatforms

respondents play
fantasy cricket
and 54% of
the respondents
play fantasy
footballrecall Dream11;
the highest
amongst all
fantasy sports
platforms, followed
by official fantasy
games of popular
tournaments incricket and football© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

15

Fantasy sports – frequency of engagement

Frequency of engagement – age-wise
distribution>5 timesa week,20%
4-5 times
a week,6%

Oncea week,
47%

19%

17%

4%

7%

29%

27%

44%

6%

2-3 times
a week,
27%

17%
48%

49%
33%

Source: KPMG in India analysis, 2019 based on survey

The survey revealed that nearly 75 per cent of the
respondents play fantasy sports 1-3 times a week,with the majority playing once a week. A significant
20 per cent of the respondents reported playing
more than five times a week. This engagement
frequency was further analysed across thefollowing parameters.

18-24

25-36

37-50

>5 times a week

4-5 times a week

2-3 times a week

Once a week

Source: KPMG in India analysis, 2019 based on survey

Though playing frequency is fairly consistentacross the age groups of 18-24 and 25-36 withnearly 75-80 per cent of the respondents playing
1-3 times a week, the 37-50 age group was seen tohave a comparatively higher engagement. Nearly
50 per cent of the respondents in the 37-50 age
group reported playing fantasy game more thanfour times a week.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

16

Frequency of engagement – income wise distribution
23%
40%

10%
3%

12%
4%

>5 times a week

31%

28%

4-5 times a week

4%
23%

8%

2-3 times a week

25%
56%

50%

Once a week

56%

27%
<INR3
lakhs

INR3-5lakhs

INR5-10lakhs>INR10lakhs

Source: KPMG in India analysis, 2019 based on survey

The engagement frequency in the income groupearning <INR3 lakh per annum shows 40 per centof the respondents playing fantasy sports more than
five times a week. Frequency of playing more than
five times a week was found to fall progressively
with increasing income levels, with only 12 per centof the respondents earning more than INR10 lakh
per annum playing more than five times a week.
This could imply that fantasy sports platforms could
potentially be considered as means for earning
incremental/supplementary by comparatively
lower income groups, leading to an increased
engagement with the platform.

Frequency of engagement – city-wise
distribution
12%
4%
28%

58%
12%

56%
Major cites

22%
8%
Others>5 times a week

4-5 times a week

2-3 times a week

Once a week

Note: Major cities includes Delhi, Mumbai, Bengaluru, Kolkata, Hyderabad, Ahmedabad,
Chennai and Pune
Source: KPMG in India analysis, 2019 based on survey.

A majority of the respondents from the largest 7-8
cities of the country were found to be playing lessfrequently than respondents from some of thesmaller cities in the country. Nearly 85 per cent of the
respondents from the major cities play fantasy sports
1-3 times a week as compared to nearly 70 per cent ofrespondents from smaller cities who play more thanfour times a week on such platforms. This outlines
deep penetration of fantasy sports across the masses
in India, especially in smaller cities.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

17

Fantasy sports – motivators for engagement
72%
48%

47%

46%
30%

Fun andexcitement

Ability to Remain Utilisation
manage connect- of sports
teams
ed withknowlvirtually the sportedge

Opportunity
to winmoney

19%

Others

Source: KPMG in India analysis, 2019 based on survey
N=336, the total % is greater than 100%, as respondents could choose more than 1
motivation

The survey revealed that motivations for playing
fantasy sports varies widely amongst respondents.
However, the element of ‘Fun and excitement’ wasthe primary motivation for engagement amongst the
respondents. The ‘Ability to manage teams virtually’,‘Remain connected with the sport’ and‘Utilisation of sports knowledge’ were otherimportant motivators for engagement, which roughly
half of all respondents mentioned. The ‘Opportunity
to win money’ was seen as a motivator for 30 per
cent of respondents, but this was only the fifth
most important factor for engagement. This ties inwith the fact (outlined in the analysis below) that amajority of the respondents play fantasy sports for
free, for ‘Fun and excitement’.
The engagement motivations we also analysedbased on the following aspects:

Motivations for engagement – income-wise distribution
Income(lakhs)Fun andexcitement

Ability to
manage teams
virtually

Remainconnected withthe sport

Utilisationof sportsknowledge

Opportunity to
win money

Others

<INR3

59%

26%

26%

20%

39%

13%

INR3-5

67%

48%

41%

48%

26%

22%

INR5-10

79%

53%

51%

50%

35%

22%

>INR10

80%

59%

56%

58%

25%

21%

Source: KPMG in India analysis, 2019 based on survey

The element of ‘Fun and excitement’ was found tobe the primary motivating factor for engaging withfantasy sports across all income groups. The‘Opportunity to win money’ factor was found tobe the second most important factor for income
levels of <INR3 lakh, whereas ‘Ability to manage
teams virtually’, ‘Remain connected with the sport’and ‘Utilisation of sports knowledge’ were the top

motivators across income groups of INR3 lakh andmore. The fact that <INR3 lakh income level was
also found to have a somewhat higher frequency
of engagement as well, could point to fantasy
sports being seen as a viable opportunity for such
respondents to supplement their income, which inreturn drives repeat engagement with the platforms.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

18

Motivations for engagement – profession-wise distribution
Fun andexcitement

Ability to
manage teams
virtually

Remainconnected
with the sport

Utilisationof sportsknowledge

Opportunity to
win money

OthersStudent (18+ years)

68%

39%

31%

35%

32%

14%

Self employed

63%

-

19%

19%

50%

6%

Professional

75%

54%

54%

51%

28%

22%

Unemployed

67%

17%

17%

17%

50%

-

Profession

Source: KPMG in India analysis, 2019 based on survey

While ‘Fun and excitement’ was found to be theprimary motivating factor for engaging with fantasy
sports platforms across professions as well, nearly 50
per cent of the respondents who were unemployed
or self-employed stated the ‘Opportunity to win
money’ as one of their secondary motivations forplaying fantasy sports. These could potentially point

to respondents who look at fantasy sports as ameans to earn additional income. For professionals,
the primary motivators for playing fantasy sports
were elements associated with ‘Fun and excitement’
and aspects relating to knowledge of and connection
with sports.

Fantasy sports – paid users
and monthly spends
Money spent on fantasy sports
platforms per month (INR)>1001, 8%
501-1000,8%301-500,
10%
101-300,
11%

Nil(free user),54%

0-100,
9%
Source: KPMG in India analysis, 2019 based on survey

Even though the opportunity to win was found tobe the motivator for 30 per cent of the respondents,
nearly 46 per cent of the respondents were foundto have played paid versions of fantasy games in thelast 12 months.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

19

Money spent on the fantasy sports platforms – income-wise distribution
4%

19%

3%
7%
7%
10%

4%

16%

11%

21%
17%

6%
3%
8%
8%
6%

>1001
501-1000
301-500

12%

101-300

12%
12%

69%

63%

0-100

56%

Nil
27%
<INR3
lakhs

INR3-5lakhs

INR5-10lakhs>INR10lakhs

Source: KPMG in India analysis, 2019 based on survey

More than 70 per cent of the respondents in the <INR3
lakh per annum earning bracket responded to having
paid for fantasy games in the last 12 months.
Of these, around 38 percent of the respondents
spent more than INR500 per month on fantasy sports
platforms. The potential reason for these spends by
respondents earning <INR3 lakh per annum could bethat they view fantasy sports platform as a means toearn incremental/supplementary income in a safe andregulated environment, as opposed to using unregulated
mediums such as sports betting.
It is also important to note that a material portion (70 – 75
per cent01) of the above quoted amount spent on fantasy
sports, are reinvestments from previous winnings on
fantasy sports platforms, as well as utilisation of cash
bonuses and offers that are periodically given to ‘highengagement’ users by these platforms.

Mode of engagement with fantasy
sports platforms
Desktop,7%
Mobilewebsite,
8%

App,
85%

An overwhelming 85 per cent of the respondents played
fantasy sports via the respective fantasy sports apps,
with playing via desktop and mobile website constituting
15 per cent of the remaining user base. This significant
app based usage is in line with the rapid growth ofmobile internet in the country over the last 8-10 quarters.

Sport played on the platform
71%
54%

CricketFootball

6%

5%

4%

KabaddiBasketball

Others

Source: KPMG in India analysis, 2019 based on survey
Note: N=336, the total % is greater than 100%, as respondents could choose more than
one sport

A majority, 71 per cent of the respondents played cricketon fantasy sport platforms followed by 54 per centplaying football which reflects the respective popularityof cricket and football in the country. Other sports suchas kabaddi, basketball and hockey were less popularamongst the respondents. However, the increasing
popularity of non-cricket sports leagues in India may see
this emphasis on cricket change in the future. The same
would probably need to be supplemented by increased
marketing efforts from fantasy sports platforms.

Source: KPMG in India analysis, 2019 based on survey
01. Based on industry discussions© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

20

Additional rewards desired from fantasy sports platforms
65%
53%

47%
27%
7%

Live Match tickets
for sporting events

Meet favourite
sports persons

Autographedmerchandise fromfavourite players

Credits for playing
more games/ winningmoney on the same
fantasy sports platform

OthersNote: N=336, the total % is greater than 100%, as respondents could choose more than one additional reward
Source: KPMG in India analysis, 2019 based on survey

The survey also aimed to understand the natureof rewards that consumers would look forward toon fantasy sports platforms, other than monetary
rewards. A significant 65 per cent of the respondents
would prefer ‘Live match tickets for sporting events’,
while ‘Meeting favourite sportspersons’ and‘Autographed merchandise from favourite players’
featured high on the wish list of respondents aswell. These factors are opportunity areas that fantasy
sports operators could look to explore in the future,
as a means to deepen their engagement with theusers, and bring them closer to the sport they love.

Recall of fantasy sports websites/apps
60%
38%
10%
Dream11 Premier Indian
League Premiere
Football League

17%
5%

3%

My
Halayplay Others
Team11

Note: Premier League includes Fantasy Premier League and ePremier League
Note: N=336, the total % is greater than 100%, as respondents could choose more than
one website/app
Source: KPMG in India analysis, 2019 based on survey

When asked to recall the names of fantasy sports
platforms that came to the respondents’ mind, 60
per cent referred to Dream11, followed by official
websites of Premier League Football/English Premier
League (EPL) and the Indian Premier League (IPL).

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

21Sportsbetting
in India

The evolving landscape of sports gaming in India

Sports betting in India is prevalent across large partsof the country, and although illegal, a huge market
exists for the same. With the motivators aroundearning money, excitement and utilising sports
knowledge finding takers both in fantasy games aswell as sports betting, there is often a perception

22

that relates sports betting to fantasy sports in
India. Through this section, we examine the usual
motivators for sports betting globally, and our survey
results throw light on how users perceive fantasy
sports vis-a-vis sports betting.

Introduction to sports betting in India –a legal background
Betting and gambling are governed by various statelegislations in India, and are largely prohibited. The
Public Gambling Act, 1867, prohibits the operationof gambling houses, visiting a gambling house, as
well as being in the possession of a gambling device.
However, it explicitly exempts ‘games of skill’ where
the skill and knowledge of the player can influence
the outcome of the result, vis-à-vis ‘games of chance’
where the results are predominantly determined byluck, which are prohibited.
The Supreme Court of India has used thisclassification in several cases in the past, terming
games such as rummy and horse racing as games ofskill, and hence legal. As per the Government of India
Act, 1935, betting and gambling are listed as Entry
34 of List II of the Seventh Schedule, allowing states
to make their own laws around betting and gambling.
While most Indian states allow the classification ofskill vs. chance, there are a few exceptions:games including betting on sports. However, anamendment to the Act in 2015 restricts thesegames to the physical premises of gaming parlours
through intranet gaming terminals within thegeographical boundaries of the state
iv. Telangana (The Telangana Gaming Act, 1974) – The
amendment to the Act in 2017 prohibits any riskingof money on an uncertain event, including gamesof skillv. Assam (The Assam Game and Betting Act, 1970)
and Orissa (The Orissa (Prevention Of) Gambling
Act, 1955) – The two states do not permit any
game for money or other stake, including skill
based games for stakes.

i. Goa, Daman and Diu (The Goa, Daman and Diu
Public Gambling Act, 1976) – The legislation
permits casinos and other games of chance.
Amendments to the Act in 1992 and 1996 added
Section 13A, allowing the state to authorise gamesof ‘electronic amusement/slot machines in Five
Star Hotels’ and ‘such table games and gaming on
board in vessels offshore as may be notified’ii. Sikkim (The Sikkim Casinos (Control & Tax)
Act, 2002) – The state allows granting licenses
for setting up casinos in the state. However, anotification in 2016 prohibits the local population of
Sikkim from playing in these casinosiii. Sikkim (The Sikkim Online Gaming (Regulation)
Act, 2008) – The Act allows certain online© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

23Market size

Revenue loss for the government

Despite the restrictions, underground betting is
still prevalent in the country. Statista Research has
estimated the size of the Indian betting market at ~USD130 billion in 2018, up from ~ USD88 billion in2012, growing at a CAGR of ~ 7 per cent during thisperiod. A majority of this revenue is derived fromsports betting. It is estimated that ~ USD200 million
is bet on every one-day international played by the
Indian cricket team.01

Unregulated betting represents a huge revenue
loss for the government since the absence ofany regulation means that illegal betting revenue
is currently not taxable. Taxing these earnings
represents a potentially large revenue opportunity
for the government. This is also likely to help curb
the black market of betting, which is purportedly
controlled by underground bookies.

Gambling revenue in India (USD Bn)

88.4

2012

90.2

2013

102.8

105.9

113.6

121.7

130.3

Corruption in sports
Unregulated sports betting and the presence of
unwanted elements (middlemen and facilitators suchas bookies) could lead to instances of corruptionin sports, with incidents of match and spot fixing
in sports such as cricket and football likely to be
executed through the above mentioned middlemen.
Loss in productivity of bettors

2014

2015

2016

2017

2018

Source: Statista Research

In cases where betting becomes addictive, there
could be certain psychological impacts on bettors
which may interfere with their day to day lives. This
could result in unwanted situations such as loss
in productivity at work, with the mind being preoccupied with betting related thoughts.
Financial losses for bettors

Sports betting – What makes it
undesirable?
Given that betting in India is largely illegal, thesports betting market is unregulated and run by
underground bookies, indicating a potential hugerevenue loss which could be earned by taxing theseearnings. There could also be other negative impactsof betting such as unregulated flow of money fromundisclosed sources, corruption in sports, as well as
the impact on bettors, such as loss of productivity,
financial losses (including bankruptcy and forcedhome sales), and psychological impacts which maylead to or compound social evils such as excessive
smoking and drinking. These have been discussed
below:

Unrestricted betting could have serious negative
financial implications for bettors. In cases where
bettors gamble beyond their means, heavy losses
may lead to situations of financial distress andpossible situations such as bankruptcy or unwanted
sale / mortgage of assets
These negative impacts as well as incidents ofcorruption in cricket have prompted a debate on theneed for regulating this market in India, and in 2018,
the Law Commission submitted a report titled ‘Legal
Framework: Gambling and Sports Betting Including
in Cricket in India’, which discussed the possibility oflegalising betting in the country.

Unregulated flow of money
Given the unregulated nature of the betting market,
tracking the sources from where money is bet is achallenge, often leading to money being invested
through unwanted sources. The presence of theseoften unverified sources of funds is likely to lead tothe creation of a parallel black market.

01. With $200 million on every ODI match, illegal betting thrives in India, Hindustan Times,
January 2016; accessed on 28 January, 2019
© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

24

Motivators for sports betting
Despite the unregulated nature of the sports betting
market in India, its growth points to the increasing
involvement of people in such activities. Whilemonetary gains continue to be the primary factor
luring people towards betting, there are several
other psychological factors that play an importantpart, as outlined below. Personal characteristics of
bettors and the type of betting activity play a role indetermining why people indulge in betting. Someof the factors that act as motivators for people forbetting include the following:

Escapism and improved social connect•

In certain social settings, betting may also be
used as an escape mechanism by bettors fromtheir daily lives. The ability to interact with people
with similar interests as well as visiting casinos
and arcades play a part in attracting certain people
towards betting•

Several people could use betting and gambling toovercome loneliness and other emotional issues
by temporarily getting distracted from such
worries. Boredom is another factor that is likely topush people towards gambling.

Monetary factors•

In most cases money continues to be theprimary factor why people indulge in betting. The
perception that betting can be used to make quick
and easy money is likely to often lure bettors,
especially new ones

Glamorous appeal•• The desire to make an overall profit or recoverlosses may also lead to people to continue betting
even when they have incurred losses, forming a
vicious circle•

In some cases, the intangible nature of the money
being used, such as paying for betting throughapps in countries that have legalised betting, may
make people less conscious of the sum being
spent, which is likely to lead people to bet beyond
their means.

Societal factors•

In certain societies, gambling is a part of theculture which may help the bettor gain acceptanceamongst a larger section of the society. Countries
like the U.K. and Australia allow certain forms ofgambling, which has potentially led to gamblingand sports betting gaining social acceptance andbecoming a major industry in these countries•

In India, although there are significant restrictions
on gambling and it is often looked upon as a social
evil, certain traditions may encourage people toindulge in gambling. Games such as Flash or Teen
Patti are widely played during Diwali, while matka
betting is popular in several parts of the country.

Enjoyment derived from risk taking•

For certain bettors, the risk and uncertainty
associated with the outcome of a bet may leadto an adrenaline rush, which could lead them
towards taking bigger risks by placing higher
value bets. In extreme cases, the thrill derived
from betting becomes so significant that it may
overpower rationality in the bettor•

People who indulge in sports betting suggest thatwatching sports is likely to become more exciting
when they have placed a bet on the game.

For certain people, gambling and sports betting
is seen to be associated with glamour. The
image of gambling can be associated withglitzy casinos and horse races attended by theaffluent, as portrayed in the media. This may
create an attractive image in the minds of people,
motivating them to get involved in sports betting.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

25

In order to better understand the above-mentioned factors, we have derived inferences from certain reports
on research conducted by agencies in Australia, where certain forms of betting are legal.

Weighing up the odds: young men, sports and bettingThis research carried out in 2018 was conductedin order to understand the sports betting market
in Australia. It was carried out in the form of
qualitative interviews on 25 men, and an online
survey where 335 bettors and 88 non–bettors
participated. Some of the key motivators behindgambling, as suggested by the report, include thefollowing:••

Enjoy placing a bet – This was the mostpopular response with ~77% respondents
selecting this option. The response was moreskewed in favour of weekly/frequent bettors
Makes watching sport more interesting –This was the second most popular responsewith ~61% respondents selecting the option.
Once again, this was more popular amongst
weekly bettors•

Enjoy the social aspect – The third mostpopular choice with ~53% respondents
selecting this option• Other popular motivations included having
sports knowledge, the adrenalin rush, getahead financially, and easy access to betting.
The responses suggest a wide range of reasons
why people indulge in betting, with enjoyment
derived from betting and connection with thesport being the most popular.

Source: Weighing up the odds: young men, sports and betting, Victorian Responsible Gambling Foundation, 2018

The Household, Income and Labour Dynamics in Australia Survey
This research was published in 2017, and is anationally representative study of Australianhouseholds to determine various aspects of life
in Australia, including spending habits. The reportpresents socio-economic factors that have a highcorrelation with incidences of gambling. Some ofthese include:•

Education: The report suggests that educationlevels and betting behaviour have a strong
correlation. Higher levels of education areassociated with lower chances of the person
being involved with betting, and on average amore educated person would spend lesser on
betting than lesser educated people•

Health: Although the health of a person has
a lower correlation with betting, people withpoor mental health have a high probability of
being associated with gambling•

Smoking and alcohol consumption: Bothsmoking as well as alcohol consumption havea high correlation with betting and gambling,with smokers and heavy drinkers being more
likely to gamble•

Income and wealth: Income levels andwealth of people also have a correlation withgambling. While income was found to be
having a direct correlation, i.e. people withhigher income gamble more, wealth had aninverse relationship, implying people gambling
less were more likely to create wealth in thelong run.

Socio-economic factors, thus, tend to heavily
influence gambling behaviour of people.

Source: The Household, Income and Labour Dynamics in Australia Survey, Melbourne Institute: Applied Economic & Social Research, 2017

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

26

The Psychology of Gambling
This research report published in 2010 explores
the psyche of gamblers in order to determine thereasons why such people indulge in gambling, andthe consequent impact it has on the society. Someof the key reasons highlighted include:••

Lure of money and improved lifestyle: The
report suggests that gambling and betting
provide people the opportunity to earn easy
money, and thereby look to improve theirlifestyle. The thought of how money would
help impact their lives is what excites anddrives bettors
Social interactions: Gambling enables people
to visit places such as casinos and clubs,
where they can interact with like-mindedpeople, boosting their self-esteem and leading

to enhanced social integration. In some cases,
people use gambling to overcome boredom•

Dealing with emotional stress: In certain
cases, gambling may be used to help copewith problems, stress and other emotional
issues. It offers people a temporary escapefrom worrying demands.

The study also highlights that the motivators could
be different for males and females. While females
are more likely to gamble due to loneliness,depression or other emotional issues, men are
more driven by peer groups, financial pressuresand employment related conflicts.

Source: The Psychology of Gambling; Australian Psychological Society, 2010

As is evident from the results of the consumer survey
around fantasy sports, the motivators for playing afantasy sports game and sports betting have certain
overlaps such as earning money, excitement andutilising sports knowledge.
		However, with the legal structure around fantasy
sports and the benefits associated with it starting to
be recognised, fantasy sports present a compelling
and legal alternative to sports betting usage, having
the potential to possibly help reduce sports bettingin the long run.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved27

Comparison between online fantasy sports
and sports betting – a consumer perspective
Our survey also aimed to understand the perceptionsin the minds of the Indian consumer around fantasy
sports and betting and what the underlying factors
behind such an association are.

Is it sports betting? Overall view
Similarto sports
betting,
31%

Nearly 68 per cent of the 31 per cent respondents
who responded to fantasy sports and sports betting
being similar, believe that the involvement of moneyin the game is the primary reason for them doing so.
55 per cent of the above 31 per cent respondents
who believe that fantasy games are ‘Purely basedon luck and chance’, points to the lack of awarenessabout the fantasy sports format in India. Twenty
six per cent of the above 31 per cent respondents
said that fantasy games give them a ‘Similar thrill as
sports betting’. This is an important factor, since it
Notsuggests that fantasy sports can position itself as ansimilarimportant and legal alternative to sports betting into sports the future.
betting,69%

Reasons for NOT associating fantasy
sports with sports betting

Source: KPMG in India analysis, 2019 based on survey

81%

Of the 69 per cent of

total respondents
A majority, 69 per cent, of the respondents did
not perceive fantasy sports to be similar to sports
betting while 31 per cent of the respondents
found similarities between fantasy sports and
32%
28%
sports betting. This could point to the fact that thedifference between a game of skill and a game of13%
chance is still unclear to a large number of users.
This demonstrates a gap in end user education andBased on Participating Sports Transactions
an aspect which fantasy sport companies shouldskill andin paid
betting is on fantasy
consider order to help spread the right message
sports app
knowledge
contests
illegalare safe
is fair andwhereasaround the legality of the genre, as well as potentiallyandtransparent fantasy
to increase end user engagement on their platforms.
sports is legal

7%
OtherssecureSource: KPMG in India analysis, 2019 based on survey

Reasons for associating fantasy sports
with sports betting
68%
55%

Of the 31 per cent of
total respondents

26%

2%Involves
Purely based Gives similar
putting money on luck and thrill as sports
on players
chancebetting

A significant 81 per cent of the 69 per centrespondents who do not find fantasy sports
and sports betting to be similar, believe that thesignificant amount of ‘Skill and knowledge’ that
goes into selection of players for the game plays
a crucial role in attaining the optimal outcome.
Reasons around the fairness and legality of fantasy
sports, and secure nature of transactions werechosen by a low number of respondents, pointing
to further awareness and education required tofamiliarise people regarding these core aspectsof fantasy sports.

Others

Source: KPMG in India analysis, 2019 based on survey© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

28

Fantasy sports and sports betting – a comparison
Online fantasy sports games, with their gameplay that allows people to play paid games, provide an opportunity
for people to indulge in monetary transactions using their knowledge of sports, in a safe, legal and regulated
environment, unlike sports betting.

AspectFantasy Sports

Sports Betting

Dealing with monetary transactions

Transparent and secure, only digitaltransactions are allowed

Unregulated with no legal recordsof transactions, potential of blackmoney dealings

Transaction sizes

Small, regulated and verifiable. Average
Transaction Sizes (ATS) range at INR25-40

Large outlays of cash,
unregulated in nature

Monetary benefits to state

Corporate tax, Income Tax, TDS & GST
earnings to the exchequer

No earnings to the exchequer

Playing environment for the users

Age restricted (18+ only) and Governmentof India (GOI) approved proof required toclaim wins

Operating in the grey market
with no restrictions

User interests

User interests protected with checks andbalances in place

No protection for bettor interests

Corruption in Sports

The outcome of a match or a singular event,The outcome of a match or a singular event
independently, has no impact on winnings/
impacts the sports bet directly, which could
losing in fantasy sports, thus it does not
foster match & spot fixing
lead to match or spot fixing

Legality

Dream11’s format of fantasy sports
approved by the Punjab & Haryana High
Court and later validated by the Supreme
Court of India

Considered illegal in India

Some of such aspects that differentiate fantasy sports from sports betting are outlined below:
Transparency in dealings•

Fantasy sports platforms offer complete
transparency to customers in their monetarytransactions. All transactions happen throughsafe and verified payment gateways, whichallows greater comfort to users. This is in contrast
to placing bets on sports, which is unregulatedwith no legal record of the cash-basedtransactions, leading to potential instance of
black money dealings• The game format allows users to view the teams

created by other users after the match begins.
Moreover, the amount of money that can be
won by different rank holders in a contest isalso mentioned in the beginning. This ensuresa transparent playing environment and prevents
any discord.

Transaction sizes• The transaction sizes in fantasy sports are

relatively small, with industry discussions pointing
to a size of an average size INR25-4002. These
small sized transactions are carried out only
through electronic means, with complete andverifiable records available to the stakeholders in
the value chain• This is in stark contrast to sports betting, which

involves a huge outlay of funds for every matchand thus has the potential to foster a blackmoney economy.

02. Based on industry discussions© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

29

Monetary benefits to the state•

Safeguard player interests

One of the key drawbacks of sports betting is
the huge revenue loss, which could be earned bytaxing the earnings generated through betting.
Fantasy sports help in solving this problem
by taxing the earnings of the players, thereby
providing a potentially significant revenue stream
to the government. Fantasy sports platforms
charge a 31.2 per cent tax on earnings of players
in excess of INR10,00003. Further, fantasy sports
platforms also contribute to the GST revenue
as online skill games are subjected to a tax rateof 18 per cent of operator gross revenue after
deducting the prize pool.

•• A regulated environment ensures that players

have the option of approaching a known entity incase of any dispute. Such an option is unavailable
in case of unregulated sports betting, where there
is no legal route available for dispute settlement

Regulated environment••

Fantasy sports platforms require users to provide
their personal information such as PAN card andbank account details as well as an address proof,
before they can withdraw their earnings. This
provides a method of tracking the flow/sourceof money, unlike in betting which operates in theunregulated grey market

Fantasy sport platforms also prohibit their own
employees from competing in such games, toensure a level playing field to their users. Users
found to be using automated computer models orbots are also disqualified from competing.

Sports corruption• There are age restrictions on users to play on

fantasy sports platforms. Most of these platforms
do not allow minors to access their games,
thereby ensuring that only users of legal age
participate in these games• The above factors help ensure that anti-social

elements are kept out to a large extent from suchplatforms, unlike in sports betting.

Helps address motivations for betting•

Fantasy sport platforms ensure that the interestsof its players are protected. New players can start
playing in free games or practice sessions before
putting money on paid versions, can accessplayer forums where different users discuss theirthoughts about the game, and even have accessto tips offered by different websites for picking
the right players

Some of the key reasons why people indulge inbetting are the monetary gains derived as wellas the high that people get from competing andwinning by making use of their knowledge ofsports. Fantasy sports offer the same benefits
to their players by allowing them to win monetary
rewards, and users can get the same high as
betting by using their knowledge about theirfavourite sport and competing with likeminded people•

Sports betting has the potential to increasingly
foster the unwanted evil of corruption in sports,
through match and spot fixing in various games•

However, unlike sports betting, it is virtually
impossible for fantasy sports to be impacted by,
and hence foster, match and spot fixing owing to
the nature of game design by the fantasy sports
operators. With a deadline to submit teams
and the ability to view all other teams by every
user, there can be potentially millions of player
combinations for every match, which makes it
virtually impossible to fix outcomes of either acomplete match or instances in any match.

With increasing digital penetration in India, afavourable demographic spread and increasing
investor interest in fantasy sports, this segment of
online sports is set to see rapid and continued growthin the near term. Coupled with the differences
between fantasy sports and sports betting as
outlined above, this segment provides an option tosports fans to engage with their favourite sports
in a legal and safe environment, at the same time
benefiting the Government exchequer with corporate
tax and GST earnings and having the potential toreduce sports betting.

• These fantasy sport platforms ensure that theirusers are aware of their accrued profits / losses by
notifying them when their accrued losses exceed
INR25,000. This ensures that the players areaware of their financial standing and enables themto make an informed choice.

In addition, while fantasy sports cannot eradicate
sports betting, it can help address the motivations
around betting in a legal and regulated environment.
It is important to educate the consumers on thesenuances of fantasy sports, so that these consumers
can make informed decisions in the future.

03. Dream11 website; accessed on 15 February, 2019.
© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

30© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

31

The
e-sports
marketin India

The evolving landscape of sports gaming in India

32

Introduction to e-sports
Another aspect of online gaming which has seen
growth over the last couple of years is competitive
gaming/e-sports. Electronic sports, also called
e-sports, are organised gaming competitions
wherein players compete individually or as a teamin a competitive gaming environment with the goal
to win the tournament. This organised competitive
gaming tournament among professional players
can also be viewed live in an arena, over television
or internet with live commentary or online throughgaming broadcasters. Some of the prominent e-sports
companies in India include Nazara Technologies,
JetSynthesys and Nodwin gaming. E-sports as asegment has grown rapidly in India over the past few
years. This growth has led to an increased interest inusers to become professional players so as to compete
in tournaments and to consider e-sports as a viable
career option.
Globally, e-sports is a flourishing market with theglobal e-sports audience expected to grow at a CAGR
of 13.6 per cent over 2017-2021, reaching 250 million
e-sports enthusiasts globally. On the revenue front,
the global e-sports market is expected to grow at a
CAGR of 26 per cent over 2017-2021, reaching a sizeof USD1.65 billion.01

Global: e-sports revenue growth (USD Mn)

1650
655
2017

2021P

Source: Global e-sports market report 2018, NewzooIndia’s e-sports market is currently at a nascentstage. However, the number of occasional viewers
and e-sports enthusiasts is expected to grow morethan five-fold by 2021.02 An increasing interest in
e-sports and expected increase in audience are likely
to result in a surge in revenue from avenues such as
advertisements, merchandise and ticketing. Also,
the ability to monetise e-sports tournaments throughmedia and broadcasting rights is likely to gain tractionin the years to come.

India: e-sports audience growth (Mn)
Global: e-sports audience growth (Mn)
10
307
192
143
2017
Occasional viewers

250
2021P
E-sports enthusiasts

2
2

10

2017

2021P

Occasional viewers

E-sports enthusiasts

Source: 2019: The rise of e-sports in India, PC Quest, January 2019; accessed on 6 February 2019
Source: Global e-sports market report 2018, Newzoo

01. Global e-sports market report 2018, Newzoo
02. 2019: The rise of esports in India, PC Quest, January 2019; accessed on 6 February 2019

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

33

Growth drivers of e-sports in India
Rapid growth in digital infrastructure
Low cost data services and the availability ofaffordable smartphones have helped increase theinternet penetration (43 percent as on September2018) and also resulted in large scale smartphone
adoption in the country, giving a fillip to e-sports
consumption.

Favourable demographics and rising
disposable income
India enjoys a favourable demographic for the overall
growth of online gaming due to its young medianage (27.9 years in 2019), resulting in a rapid adoptionof e-sports as well.03 Also, nearly 61 per cent ofIndia’s population is expected to be under the ageof 35 in 202104. This relatively young population withincreasing disposable incomes and access to digital
infrastructure are expected to be early adopters ofdigital/online gaming in the country.

Increase in interest of international
e-sports organisations in India
With growing interest among Indian gamers, someof the prominent e-sports companies have started

organising e-sports tournaments in India in thelast few years. These events, such as ‘ESL India
Premiership 2018’, ‘COBX Masters 2018’, ‘UCypher’etc. have helped change the course of the Indiane-sports scene majorly considering the scale andprize money involved. Also, e-sports were featured
as a demonstration sport in 2018 Asian Games.

Growth in investments
With an increase in demand for competitive
games, gaming companies are making substantial
investments towards developing the e-sports
ecosystem in India. For example, Nazara
Technologies plans to invest USD20 million todevelop e-sports in India over a period of five years,05
whereas COBX Gaming announced an investment of
USD10 million in the Indian e-sports market.06

Viable career option
The rising adoption of e-sports has created anecosystem of opportunities across the value chain,
resulting in e-sports being a viable career option forpeople associated with the segment.

Challenges facing e-sports in India
Despite the growth of e-sports in India, it is facing
headwinds which need to be addressed to ensurethat this segment is able to continue on its growthpath. Some of the key challenges are outlined below:

Geographical expansion
E-sports tournaments currently are specialised andhappen only at a national level rather than locally as
tournament organisers struggle to find support fromboth local sponsors and sports associations. For the
sport to truly gain traction, adoption at local/regional
levels would be paramount in the future.

Monetisation challenges

rights for e-sports that limit the entry of competitive
gaming into traditional media and the amount ofmoney potentially connected to it. This contrasts withtraditional sports, where the sale of broadcasting
and media rights is the biggest source of revenue formost sports organisations.

Advertiser association with e-sports
Due to prejudices against competitive gaming, many
brands are still reluctant to associate themselveswith e-sports. These prejudices are often related tothe e-sports audience demographic and the definitionof ‘quality content’, which varies from game to gameand may not be as per audience approval.

One of the major monetisation challenges is thecurrent structure around local and global media

03. United Nations World population prospects; accessed on 18 February, 201904. Population pyramids of the World from 1950 to 2100; accessed on 18 February, 201905. How digital gaming in India is growing up into a billion-dollar market, Forbes, March 2018;
accessed on 11 February, 201906. Route mobile founder to invest $10m in eSports, launch online league, Economic Times,
March 2017; accessed on 8 February, 2019

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The evolving landscape of sports gaming in India

Lack of awareness about e-sports
amongst the larger gaming population
The lack of awareness around the larger context
and definition of e-sports amongst the wider online
gaming populace remains a concern for the industry.
While attempting to uncover this understanding fromour dipstick survey of 336 fantasy sports users, it was
found that nearly 55 per cent of the respondents had
an incorrect understanding of e-sports, associating
it exclusively with sports based games. A further 22
per cent of respondents were completely unawareof what e-sports constitutes. Fostering a clearer
understanding of the e-sports segment would be
crucial for the industry in terms of being able toharness the segment’s true potential.

.

34

Annexure: Respondents demographics
37-50,

50+,

6%

1%

Age Group

25-36,

18-24,

Total: 336

52%

41%

55%

>INR10lakhs, 51%
22%

22%

<INR3
lakhs, 18%

Income levels
Total: 306

INR5-10
lakhs, 22%1%
Any online
Any sports
based online game played
game, played professionally
professionally

Unawareof e-sports

Others

Source: KPMG in India analysis, 2019 based on survey

Regulatory challenges
In accordance with the growth of e-sports industry
in India, appropriate governance of the e-sports
segment is yet to mature. Thus, it is of utmost
importance that an e-sports governance systemshould be modelled in compliance with all the existingnorms of the Sports Code and Indian Olympic
Association (IOA) requirements.
With the rapid growth that e-sports and the overall
online gaming space is seeing in India, it would be
imperative for e-sports companies and associations
to join hands and address the above challenges toensure that the growth momentum is maintained andIndia as a nation can look to compete with the top
global destinations for e-sports in the years to come.

INR3-5lakhs, 9%

Uemployed,2%
Self
Employed,

Professional,
71%

5%Student,
22%

Profession
Total: 336

10th Pass,12th Pass,

2%

3%

Others,10%

Education
Total: 336
Post
Graduate,
42%

Graduate,43%© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

Acknowledgements© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG in India
Ankit Setia
Arshia Mittal
Shivam Sethi
Vibhor Gauba
Shveta Pednekar
Rishabh RaneIFSGHarsh Jain
CEO and Co-Founder, Dream11
Amrit Mathur
Advisor IFSG, ex-COO, Delhi Daredevils,
ex-Advisor to Ministry of Youth Affairs and Sports
Ratnakar Shetty
Advisor IFSG, ex-CAO - BCCI© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reservedAbout KPMG in India
KPMG in India, a professional services firm,
is the Indian member firm affiliated with
KPMG International and was established in
September 1993. Our professionals leverage
the global network of firms, providing detailed
knowledge of local laws, regulations, markets
and competition. KPMG has offices acrossIndia in Ahmedabad, Bengaluru, Chandigarh,
Chennai, Gurugram, Hyderabad, Jaipur, Kochi,
Kolkata, Mumbai, Noida, Pune, Vadodara andVijayawada.

KPMG in India offers services to national andinternational clients in India across sectors. We
strive to provide rapid, performance-based,industry-focussed and technology-enabled
services, which reflect a shared knowledge ofglobal and local industries and our experienceof the Indian business environment.

© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

About IFSG
Formed in 2017, Indian Federation Of Sports
Gaming (IFSG) is India’s first and only Sports
Gaming self-regulatory industry body formed
to protect consumer interest and create
standardised best practices in the Sports Gaming
industry. The Sports Gaming industry comprisesof companies that operate online sports-based
Games of Skill (which may include e-sports,
Fantasy Sports and casual sports games). IFSG
aims to create a thriving ecosystem for users &operators by laying guidelines for a common setof practices, setting standards of operation andcreating a regulatory framework to protect theuser and operator interests.
IFSG works with key industry stakeholders
and liaisons with the Government andpolicymakers to create standardised bestpractices, set industry benchmarks with a strong
governance structure, thereby protecting its
consumers and operators. IFSG currently has
27 members across Fantasy Sports operators
and Sports analytics firms. For now, IFSG has
three committees viz, Member committee, Legal
Committee, and Taxation Committee and plans tocreate some more through the year.
Recent initiatives by IFSG:

aim to identify and support India’s future sporting
talent in diverse set non-mainstream sports suchas Sailing, Squash, Tennis, Swimming and Golf.
Athletes selected under the programme areoffered critical support towards the fulfillmentof their sporting goals. After a rigorous selection
process led by GoSports Foundation, who arethe ‘Implementation Partner’ of this initiative,
13 talented athletes have been selected to bea part of IFSG’s Stars of Tomorrow programme.
Dream11 Foundation, the primary contributor
to this programme, has pledged Rs.3 crore to
support IFSG’s cause. The program was also
supported by Fantain.
• Inaugurated GamePlan, India’s Annual Sports
Gaming Conference on 22 February 2018
• Launched a legal report “The Laws Relating
to Fantasy Sports Games in India” - an SLPC
initiative with contributions from NDA, CAM,
Khaitan & Co. & LawNK• Published ‘Scoring Big with Sports Gaming’,
India’s first report on the emergence,
consumption patterns and growth of fantasy
sports in India, in collaboration with AC Nielsen• Appointed international legal expert and Ex-IMG
consultant John Loffhagen as the President• In December 2018, IFSG launched an athlete
support programme called ‘Stars of Tomorrow’(SOT). The programme has been created with an© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved

KPMG in India contacts:

IFSG contacts:

Nilaya Varma
Partner and Leader
Markets Enablement
T: +91 124 669 1000
E: nilaya@kpmg.com

John Loffhagen
President
T: +44 7747011480
E: president@ifsg.in

Satya Easwaran
Partner and Head
Technology, Media and Telecom
T: +91 22 3989 6000
E: seaswaran@kpmg.com
Girish Menon
Partner and HeadMedia and Entertainment
T: +91 22 3989 6000
E: gmenon@kpmg.com

Vivek Srivastava
Secretary General
T: +91 96194 71464
E: vivek@ifsg.in

IFSG.in

KPMG.com/in

Follow us on:
kpmg.com/in/socialmedia

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© 2019 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International
Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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