Indian Fantasy Sports Industry Set for 7-9% CAGR Growth Amidst Tax Uncertainty
A new report jointly published by Google India and Deloitte has predicted a compounded annual growth rate (CAGR) of 7-9% for the Indian fantasy sports industry, from $1 billion to $1.6 billion, by FY 2030.
However, this optimistic outlook is tempered by growing tax woes and legal uncertainty. The imposition of a 28% Goods and Services Tax (GST) on player entry fees charged by popular fantasy sports apps such as Dream11 and Mobile Premier League (MPL) in July 2023, has hit the industry hard. Many apps have seen mass layoffs, shutdowns, and a funding crunch since then.
In its report released last April, Deloitte had projected a 30% CAGR for the Indian fantasy sports market by FY 2027. However, Prashanth Rao, a partner at Deloitte, acknowledged that the new taxation and legal issues have put the brakes on the industry, saying "it was flying at a very fast pace, but we expect that there will be a slight bit of recollection time at this point as the industry reorganises itself."
The report also highlights that fantasy sports and e-sports are counted among the core sub-sectors fuelling India's sporting economy. It projects that more Indian users will play online games on fantasy sports apps, with the player base set to hit 430 million users by the end of the decade.
However, concerns over online gaming addiction among youngsters remain a pressing issue. Earlier this year, the central government was eyeing "China-like" time limits and curbs in an attempt to tackle addiction.
On the brighter side, the report projects that the E-sports industry in India will witness a CAGR of 25% from $40 million to $200 million by FY 2030. The entire Indian sports ecosystem is estimated to be worth $130 billion by 2030, creating 10.5 million jobs and contributing $21 billion in indirect tax revenue.
Overall, the fantasy sports industry's growth trajectory hinges on overcoming the hurdles posed by taxation and legal uncertainty, while also addressing concerns over addiction and ensuring responsible gaming practices.