Regulation by the government will generate a wider user base for the online fantasy sports operators who will benefit from regulation in the long run
The advent of fantasy sports has created an enthralling world for people who cherish the idea of engaging in sports. It is a medium that permits them to showcase their skills and talent, while compelling them to channel the adrenaline and restlessness in the right direction. The gradual growth and evolvement of fantasy sports and the gaming industry has invited conflicting opinions and extensive debates regarding their legality and security. The pandemic has also contributed to the unexpected growth of the fantasy sports segment as it has proved to be an appealing activity during a time of social distancing where majority of day to day activities have gradually reduced. Furthermore, over the years the affordable data plans, the internet connectivity, the mobile penetration, virtual reality, availability of 4G and artificial intelligence have enhanced the popularity of the segment.
Online Gaming: A huge Controversy?
Real Money Gaming (RMG) platforms have a perception problem in our country, unlike the western world where there is clear awareness and understanding of skill gaming. The traditionally old perception around the game has been a barrier to the process of gaining formal recognition to the fantasy gaming sector. Their lack of awareness has given rise to this problem. However, stakeholders have placed arguments for the fantasy gaming sector, strongly placing it under the category of skill, talent and strategy rather than chance. Various Supreme court judgements have ruled that there is a huge contribution of the skill element as opposed to the chance element. Besides this, stakeholders have also stated that the growth of the gaming segment has picked up pace and that gambling regulations should not be associated with gaming as there is a difference between gaming and gambling, and gambling is rendered illegal. Continually, they have been granted an exception from the anti-gambling regulations in the state. A lack of clarity regarding the rules pertaining to this segment and the wait to gain formal recognition are leading to preventable controversies.
Fantasy Sports: A Flourishing Industry In India
The inevitable growth of fantasy sports has been unhindered as gaming stalwarts have moved on to establish themselves providing the much needed encouragement to potential OFS operators.
As per a study and report by the Federation of Indian Fantasy Sports (FIFS) and KPMG the contest entry amount has grown from 6000 crores in 2019 to 16500 crores in 2020. Furthermore, the user base has increased to 90 million in 2019 as opposed to 2 million in 2016. The robust growth calls for a need for regulation to ensure fair practices and safety of users, prevent malpractices and security breaches.
As per the FIFS-KPMG report, fantasy sports industry has recorded approximately 2400 crores in revenue last year leading the government to collect 776 crores from the OFS industry. The intervention of the government would lead to the taxes channelised in such a manner that would lead to the productivity and well - being of the people and country. The enhanced quality of education will indirectly lead to a well-educated constructive consumer. Regulation by the government will generate a wider user base for OFS operators who will benefit from regulation in the long run.
Either people are directly dependent or indirectly dependent on the OFS industry as it has provided people with employment opportunities. 1500 people were involved in this industry between 2016 and 2017. Moreover, people are provided with the opportunity to earn money by indulging in fantasy gaming. In 2019-20 users have made approximately 13,997 crores as winning amounts. The exciting cash prizes and rewards can sometimes be a bane in people’s lives. Government regulation can enable the segment to generate more employment opportunities; and restriction with regards to age limit will safeguard the interests of the youth.
NITI Aayog Guidelines
The guidelines imposed by NITI Aayog for the regulation of the Indian OFS operators has provided much needed direction and relief. Their recommendation of a single self - regulatory organisation and the provision of a clear vision to the users and operators ensures a responsible and transparent process that will enable the fantasy sports industry to grow. The restriction that players of age 18 years old and below are not permitted to engage in PTP (pay to play format) is with the aim of protecting and securing teenagers from this activity. Furthermore, they have recommended an independent oversight board to undertake the responsibility of controlling and regulating the self-regulatory organisation. Besides this, the safe harbour exemption will be awarded to OFS operators relying on their ability to follow guidelines and conditional to the fact that they are members of the self-regulatory organisation.
Overall, the fantasy sports industry is indicating success and the inherent love received by the audience in this sector, bears testimony to a bright future in the realm of online gaming. A further boost can be achieved if the government takes an active stance towards the regulation for fantasy gaming. A uniform national policy for all states should be established and legally approved, to ensure transparency amongst the sector and responsible trading practices.
The author is Navkiran Singh, Founder and CEO, Baazi Games
Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.
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