There is an hour to go for the Indian Premier League cricket match between the Delhi Capitals and Sunrisers Hyderabad and Manya Pilani, 21, is bustling about. She’s neither close to the ground nor part of the entourage that trails these teams. Instead, the business executive is following minute by minute updates on her smartphone, as she pieces together her team on the Dream 11 fantasy gaming platform.
She and some 60 million other users (Dream 11 started this edition of the IPL with 50 million users) are poring over team tactics and playing conditions before finalising their teams. Dream 11 locks up team choices 30 minutes before IPL games commence. Depending on the actual on ground performance of the players a user chooses, she stands to win cash prizes.
Over much of the past couple of decades, fantasy gaming has been the preserve of sports nerds who have spent inordinate amounts of time researching teams and players to the last detail. In Europe and North America, fantasy gaming is the preserve of people who sign up for the long haul.
Competitions take place, for example, over the duration of an entire English Premier League season (August to May; 38 games), with fantasy gamers obsessing about player skills, ground conditions, weather and home-away records. It’s like testing your skill as a team selector or coach.
Websites, discussion boards, social media and TV programming is closely followed, with some sites even letting users use algorithms to help them make their squad choices. Historically, fantasy sports, which began in the US and in Europe, focused on sports such as baseball and football, have been social, season-long initiatives.
Friends, family and co-workers have handed together to assemble fantasy teams and win points based on how on how their picks perform. People form private leagues on online platforms and compete against each other, primarily for bragging rights, even if there can be some real world money bets involved. According to Orbis Research, the global sports fantasy gaming market is forecast to grow from $13 billion to $33 billion by 2025. Dream 11’s elevation to the unicorn club this month has excited players in this space as well as investors.
In India, the fantasy gaming story is newer and different. The market here is sharply focused on what is called daily fantasy. Here bets are placed on single matches and performances and unlike previously, you know your winnings [or losses] by the end of the day, or in the case of IPL, in a few hours. Winners can end up winning large sums.
According to regular Indian fantasy gamers, paid games cost as little as Rs 10 to buy into and total prize pool can range from just Rs 100 to Rs 10 crore. Winners get paid from this pool and the fantasy gaming companies get a share too.
However, barely 10 in 100 fantasy gamers pay to play, instead choosing to play free games, with winners boasting bragging rights, rather than financial earnings. For gaming companies, the business challenge is to first grow the overall number of gamers and then convert a good fraction of them into paying customers.
Until three years ago, the Indian fantasy gaming market was restricted to just four or five companies, who operated under the radar, thanks to opaque gaming laws.
However, thanks to multiple court judgments that ruled that such games were predominantly those of skill and not of chance, the industry has shed the shadow of gambling that used to surround it. Back in 1968, the Supreme Court ruled in what’s referred to in legal circles as the Satyanarayana case, that the card game of rummy was one of skill and not of chance. Then three decades later in 1996, in the Lakshmanan case, betting on horse racing was also ruled a skillbased activity.
Then, the Nagaland Prohibition of Gambling and Promotion and Regularisation of Online Games of Skill Act, 2015, expressly recognised fantasy gaming as one of skill for the first time. In April 2017, the High Court of Punjab and Haryana became the first court to rule that a fantasy league, in this case Dream 11, was one of skill.
This judgment has served as the bedrock for the industry’s surge over the past couple of years. Today there are anywhere from 50 to 80 companies scrambling for users in this market, according to industry estimates.
While the Tencent and Kalaari Capital-funded Dream 11 may be a clear leader, others such as Fantain, Halaplay and My Team are seeing strong traction. “We expect to have 250 million users across all sports in three or four years, as more sports gain followers and more users, especially older ones, and women, come aboard,” says Harsh Jain, CEO, Dream 11.
“This is an area of instant gratification.” The race is on to snare the maximum number of users, for now, with companies such as Dream 11 allowing users to pay as little as Rs 10 to play a single game. “We want to adopt the sachet system adopted by the consumer goods industry to grow,” he adds.
The market is still attracting new entrants. Cricply, a fantasy game launched last month, is luring users to play for free and to match their skills against cricketer Gautam Gambhir. “At CricPlay we are committed to creating a world class fantasy gaming experience by redefining the current transactional nature of spending money to play, to playing for the love and joy of cricket where all fans are welcome irrespective of their ability to spend,” says CricPlay business head Gaurav Sarin. (Times Internet, part of ET Magazine’s publisher Times Group, runs CricPlay.) In little over a fortnight since IPL 2019 started, he claims the firm has added some 10 million new subscribers. There are plenty of users happy to jump aboard like the Delhi user Pilani.
“Casual gaming is an opportunity for me to use my knowledge about cricket and pretend to own a team,” says Pilani in Delhi. Over the years, since her childhood, she has loved following and watching cricket.
Over the last couple of years, this fascination for the game has pushed her from a diehard fan to fantasy gamer.
For at least 30 minutes every game day, the young executive is busy selecting her team and refining her strategy for the ongoing IPL. She’s done decently, making some money along the way and is part of a private league of some dozen-plus friends who try to best each other on these days.
In Gujarat, Nitesh Yadav, 22, a civil engineer, is closely tracking the progress of his favourite IPL teams and players, as he watches how he fares on another platform, the Bookmyshow.com-owned Fantain. “I obsessively track cricket and have even played the game up to university level,” he says. “This is a good way to make some money off of my knowledge.”
This gamer enthusiasm works well for companies in this market. For the moment, firms such as Dream 11, Fantain and Halaplay, are happy to pursue these free and minimally playing users. According to estimates from a recent report issued by management consultancy KPMG, there were 50 million fantasy gaming users in 2018 and this is likely to double by 2020.
This growth makes it easy to overlook the weaknesses in the industry. “After the initial high of the IPL and Cricket World Cup, this explosive growth in the market will slow and I don’t think there’s space for more than 10 companies here,” says Anand Ramachandran, co-founder and CEO, Fantain.
Companies such as Dream 11 and Faintain have been on a slow boil. Faintain, for example, started off in 2013 with a B2B focus, building out the tech to manage fan zones and analysts for IPL franchises such as Sunrisers Hyderabad and Kolkata Knight Riders.
However, commercialising this start proved harder than expected for the three co-founders, who turned to Bookmyshow, the online ticketing leader, for a funding booster dose. This decision helped the company pivot to focus on consumers and build a fantasy gaming business with two million users. “The challenge for us is to not be seen as only chasing unviable growth, but also have a clear path to profitability,” Ramachandran said.
This path may be hard to find. While user base is exploding, finding a critical mass of big-spending, sticky users remains a challenge. According to multiple estimates, users spend little over Rs 50 on average a year to play fantasy games. Company CEOs are hoping this will grow exponentially as familiarity grows with the concept and users become willing to pay more.
“Many fantasy gamers play for the thrill of socialising and competing with friends and less for the possibility of monetisation,” says Manikantan Narayanan, 34, product manager for a large tech company. He should know. For much of the past decade, the Bengaluru resident has been a fantasy football gamer, starting with ESPN’s Super Selector and growing his skills — and points — along the way.
This avalanche of fantasy games, almost 90% of them played on the mobile phone, also face a struggle to be noticed on smartphones. While social media hogs the limelight, fintech apps (banking, payment and wallets) are also important to users. Then, within gaming too, fantasy comes some way down the pecking order (see infographic). The daily fantasy format also is a put off for ardent gamers such as Narayanan.
The challenge for ardent gamers like him, he contends, is a lack of deep involvement in the game. In the case of Dream 11, for example, the approach for him is almost too simplistic: choose 11 players between two teams, sit back and hope for the best. “Much of the intensity of thinking through teams, players and a season-long slog is lost.”
Beyond the IPL and then the cricket world cup, the attention of gamers may dwindle, given that cricket accounts for 80-90% of the fantasy league base currently.
Companies need to diversify both their games and the demographic they sign up to ensure the durability of their business. Currently nine of 10 players are male and a similar share are aged 18-30, industry estimates show.
Halaplay, a venture founded as recently as January 2017, thinks it has some answers to these concerns. While the firm already has over four million users, its CEO Prateek Anand is focussed on not only growing users (thanks to the IPL boost he thinks this will jump to 10 million), but diversifying the gamers pool and the sports on which they can compete. “There is life in fantasy sports beyond cricket …we think everything from kabaddi to archery can make a strong business case.”
Making a strong business case that extends beyond the hubbub of the ongoing IPL may be Anand and every other founder’s biggest challenge.