Online fantasy platforms get support from unlikeliest source - the govt

With the online fantasy game platforms under increasing duress due to the bans by various State governments, the Indian (Central) government seems to be stepping in to clear the confusion.

Niti Aayog, Indian government's policy think-tank, has recommended the setting up of a single self-regulatory body for online fantasy sports in India. 

In a draft report titled “Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India", Niti Aayog has said the new regulatory body should be approved by the government.

The draft report is seen a shot in the arm for online fantasy sports platforms that are now facing the heat in several States.

In India online gaming is a state subject, and what is legal in one part of the country, may not be legal in another part. 

The draft report seems to suggest bringing in uniformity in terms of operating standards.

What does the draft report on online fantasy gaming say?

The draft report says the oversight board has to be answerable for the implementation of the uniform pointers and rules and getting the Fantasy Sports Platforms (OFSP) adhere to the same.

“NITI Aayog has initiated this discussion to examine the fantasy sports industry structure and consider evolving guiding principles that can help the industry to grow by adhering to guidelines which are consistent and based on well-recognised principles," the report said.

“All OFSPs that are members of the self-regulatory organisation should enjoy the benefit of the safe-harbour exemption, subject to their adherence with the norms and procedures laid down,” it added. 

The inconsistent rules across various states in the country "may even deprive sports fans in some states of their right to engage actively on these OFSPs," the draft report said.

“Formal recognition of the fantasy sports industry and providing for principle-led governance would enable Indian OFSP operators to focus on innovation and achieve scale and expand their operations in a clear and principle-based regulatory environment," the report added.

Fantasy gaming platforms mushroom in India 

Niti Aayog has also asked fantasy sports providers to comply with standards prescribed by the Advertising Standards Council of India (ASCI) and be fair and truthful while portraying the game only as a means of amusement and not as a source of sustenance or livelihood.

While online fantasy sports in India have drawn over Rs. 1500 crore in investments from foreign investors over the past few years.

Fantasy league games have mushroomed in recent times thanks to the IPL and cricket fever. The recently-concluded IPL's title sponsor itself was a fantasy league platform.

The Indian online gaming industry is projected to become a one billion dollar industry by 2021.

According to a recent study (done by Federation of Indian Fantasy Sports (FIFS) in collaboration with KPMG), there are around 100 million fantasy sports users in India today. The Indian Online Fantasy Sports (OFS) industry has been growing at a rapid pace registering a 212% CAGR in the user base between 2016-19.

About 74 percent of the users play fantasy leagues one to three times a week. 

According to the report, close to 20% of the active users on OFS platforms are paid-users while 30-40% users play OFS on more than one platform.

The online fantasy sector operators' gross revenues stood at over Rs 2,400 crore for the FY20 from Rs 920 crore in FY19. 

The sector also saw a 160% increase in revenue, from INR 920 Cr in FY19 to Rs 2,400 crore in FY20.

As India is a mobile-first country, more than 90% of online gamers play games on their phones. In 2019, around 5.6 billion mobile gaming apps were downloaded in India – the highest in the world and representing nearly 13% of gaming apps globally.

Despite all this, the legality of fantasy sports in India is dependent on whether the game qualifies as a 'game of skill' or a 'game of chance'. Games of chance fall under the ambit of gambling and are thereby restricted by state gambling laws. However, games involving considerable and substantial degree of skill (mathematically, more than 50%) fall outside the scope of gambling laws and hence are legal in India.

The Niti Aayog draft paper hopes to address the ambiguity in the laws across the States.

Via: Niti Aayog

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