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Dream11 Wins IPL 2020 Title Sponsorship: Inside the Future of Fantasy Sports in India

Aug 20, 2020 12:11 PM 4 min read

While the ongoing pandemic may have dampened our spirits to some extent, that does not apply to any enthusiasm when it comes to cricket.

So is it really a surprise that today’s focus is on Dream11, the gaming company which won the title sponsorship for IPL 2020?! Once Vivo withdrew its name after all the China love enveloping the country, Dream11 also edged out Byju’s and Unacademy. So let’s dig in - Dream11’s business model, India’s upcoming fantasy sports sector and the legal wrangle the company had to endure to emerge as the country’s first gaming company to enter the $1bn club.



Dream11: Coming Full Circle?

The idea to launch Dream11 reportedly first took shape when IPL was launched in 2008, and the Mumbai-based fantasy sports platform saw the light of the day in 2009.

For the uninitiated, a fantasy sport is a game where participants can create their own imaginary teams using real players from different teams scheduled to play in a league/match. They win or lose based on the real performance of the players in their fantasy team.


Rise of Fantasy Sports in India

As per a recently released joint report by the Federation of Indian Fantasy Sports (FIFS) and KPMG, the gross revenue of online fantasy sports (OFS) operators including Dream11 trebled to ₹2,470cr ($331m) in FY20 vs ₹920cr ($123m) in the previous fiscal.

The OFS market clocked Contest Entry Amount (CEA) - the amount of money that a user has to put in to play a match on the platform (think of it like the overall flow of money going in) - of ₹16,500cr ($2.2bn) in FY20 vs ₹6,000cr ($805m) in the previous year.

This rise in numbers is led by an increase in overall user base and number of platforms to play on, which in turn was concurrently pushed by an aggressive growth in India’s digital infrastructure i.e. Faster internet, cheaper data, higher smartphone penetration, rise in digital transactions via UPI and mobile wallets and growing popularity of sports leagues

While the number of users grew from two million in 2016 to 90 million in 2019, the number of OFS platforms increased from fewer than 10 operators in 2016 to over 140 by 2019.




In this growing market of fantasy sports, the biggest player is Dream11, which commands nearly 90% market share. And even on the platform, cricket rules the roost, accounting for 85% of the engagement.


Business Model of Online Fantasy Sports in India

The OFS industry primarily has two business models: 


1. Free to Play, Ad-Based

Dream11 started off as an ad-based app, free for all users. But that business model did not work out for long, following which it launched a freemium model. 


2. Pay to Play

Users can play in practice contests that are free to join or in cash contests that require them to pay an entry or platform fee. The company makes money by earning a small percentage of the bets made (i.e. The CEA). Average ticket size here varies from ₹35-40. Operators distribute the prize pool amount post deducting a fee of 10-12% on the CEA. 

Other monetisation models currently deployed only marginally include advertisements, sponsorships and brand partnerships.


Key Challenges Faced by Fantasy Sports Companies in India


This is perhaps one of the biggest challenges faced by fantasy sports companies in India. Domestic leagues are organised for about 6-8 weeks annually, and global tournaments are held once in 2-5 years. Seasonality greatly affects user engagement and disrupts revenue flow.


There has been a lot of speculation around the legality of fantasy sports in India. But these were put to rest by a Punjab and Haryana High Court’s landmark ruling that regarded Dream11 as a ‘Game of Skill’, followed by the Supreme Court’s dismissal to challenge the HC’s verdict. The courts have also clarified that the format offered by OFS platforms does not fall under the ambit of the Indian Public Gambling Act of 1867.

However, despite these rulings, preconceived notions often lead to reluctance in participation.

Low Entry Barrier

The increasing popularity of OFS has resulted in the rise of multiple such platforms with similar offerings and little in terms of differentiation. When combined with deep discounting, cash discounts and other customer acquisition tactics, sustenance in such an over-crowded market becomes an issue.


Dream11 Wins IPL 2020 Title Sponsorship: Inside the Future of Fantasy Sports in India


Over-Reliance on Cricket

As discussed earlier, despite the inclusion of sports such as hockey, kabaddi, baseball, basketball and volleyball, cricket still rules the roost here, and overt dependence on a single sport is likely to disrupt stability during lean months.


Future of Fantasy Sports in India

Indian OFS industry indirectly generated ₹2,600cr ($349m) revenue for the ancillary industries as well including payment gateways, technology providers, media platforms and agencies in FY20, and created 3,400 direct and over 5,000 indirect jobs, despite the impact of the pandemic. And if one were to take a cue from yet another digital disruption in India - OTT platforms - the future of OFS platforms is as bright as it can be.


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