Indian apps dominate fantasy sports and betting markets: Report

Betting and gambling remain illegal in most parts of India under the Public Gambling Act of 1867. However, sports betting apps are gaining traction, with 1.94 million new downloads in 2023, according to data.ai's "State of Mobile 2024" report. Notably, 260,000 of these downloads occurred in the last quarter of 2023, raising concerns about the effectiveness of the bans. Globally, sports betting apps reached 42 million downloads in Q4 2023, up from 37 million in Q4 2022.

Consumer spending on sports betting in India surged to $121,000 in 2023, compared to $105,000 in 2022 and just $28,000 in 2019. This growth mirrors the rise in fantasy sports, where nine out of the ten most downloaded apps worldwide are Indian, including Dream11, My11Circle, Howzat, and others. Data.ai categorizes these under "Fantasy Sports and Sports Betting Apps."

In India, consumer spending on fantasy sports jumped from $25,000 in 2022 to $120,000 in 2023. The report attributes the popularity of these apps to their ability to make users feel involved in the action. My11Circle and Dream11 have been notable sponsors of major cricket tournaments like the Indian Premier League (IPL) and the Cricket World Cup.

Impact of GST Short-Lived

Gaming app downloads dropped significantly in Q2 2023 but rebounded in Q4 2023, despite the Indian government's retrospective imposition of a 20% GST on Real-Money Gaming (RMG) in October 2023. The tax was initially seen as a major setback for the gaming and fantasy sports sector, which is a leading advertiser and sponsor of sports tournaments. However, the tax did not deter gaming enthusiasts.

With approximately 455 million gamers, India's gaming segment has become a significant force in the media and entertainment sector, surpassing filmed entertainment to become the fourth-largest segment. Nearly a quarter of these gamers engage with online games daily, and about 90 million pay for online games. Real-money gaming accounts for 83% of segment revenues, according to an EY report. The report also predicts robust growth for the sector, projecting it to be worth Rs 38,800 crore by 2026.

Betting in a Legal Grey Area

India's unregulated gambling industry is valued at approximately Rs 8,20,000 crore, with spikes in business during major events like the IPL, World Cup, and elections. In December 2023, the central government banned 174 betting and gaming apps, including Mahadev, Parimatch, Fairplay, 1XBET, Lotus365, Dafabet, and Betwaysatta.

Despite these bans, the absence of a definitive law governing online betting leaves it in a grey area. Experts note that while sports betting and game-fixing are banned, fantasy gaming apps are categorized as "games of skill," allowing them to operate. Various laws, including the Consumer Protection Act and IT Act, impact the sector, but regulation primarily falls under the outdated Public Gaming Act of 1867, which is subject to state-level interpretation and enforcement.