Niti Ayog’s high-sounding regulatory plan for fantasy sports is a maze

Amid all the ruckus happening in politics and along the highway around Delhi, India’s policy think tank Niti Ayog this week released a high-sounding paper or report which even economists will find difficult to comprehend. It has an extravagant name too: Guiding Principles for the Uniform National-Level Regulation of Online Fantasy Sports Platforms in India.

There is some reason for such a hurried release of the report. Fantasy sport, or online gambling in other words, has gained huge ground over the last three years in India where gambling/betting itself is banned. In fantasy sports, members who have paid money to play, can select their own cricket team from existing players and match it against other teams to win prize money, akin to gambling. The new sport can win one huge money.

On the home page of Dream11.com, a popular fantasy cricket platform, Sonu Shrivatsav, a player boasts of having won ₹25 lakhs. The site itself boasts of having 10 crore (100 milion) registered players on its site. No wonder Dream11 became the sponsor of the recently concluded IPL league. It reportedly paid ₹220 crore to clinch the sponsorship deal, outgunning Tata, Byjus and Unacademy. Dream11 replaced Chinese phone company Vivo which paid ₹440 crore annually to sponsor IPL. Mobile Premier League (MPL), another company won the rights to sponsor the Indian team’s jersey for an annual royalty of around ₹8 crore.

If this is big money being thrown by unknown entities, it is because there is clearly big money in online fantasy sport, maybe almost as much as gambling.

The Niti Ayog’s report is an attempt to regulate the online money-minting sport. Since these games are online, the companies tend to skirt the law and operate in a legal twilight zone, making enforcement of laws a tricky difficult.

While Dream11 started with little fanfare in 2008 and quickly garnered membership to become a unicorn (a company worth ₹1 billion), others followed suit. Today, there are at least five other major cricket fantasy game platforms: MyTeam11, My11Circle, Halaplay, Mobile Premier League, Fanfight and Cricplay. Foreign investors have contributed approximately ₹1,500 crore into these fantasy games in the past two years as memberships soared.

According to experts, these online games have positioned themselves as ‘games of skill’ rather than ‘games of chance’ (betting which depends on luck). Horse race betting which is legal, is considered a skilled enterprise while the same in cricket is banned as it is construed as a sheer stroke of luck.

The Niti Ayog report is not fully antagonistic to this fantasy sport, and may be showing the door to finally opening up online betting in sports too, which is legal in many countries where India plays cricket. For instance, while private betting companies in the UK make huge money when India goes there to play, no company here benefits, neither does the government which loses out on tax and related income.

The report calls for a regulatory body which “should be a single-purpose fantasy sports industry body and have membership of online fantasy sports platforms (OFSPS).” The report also notes that the regulation on the availability of the games varies from state to state which results in “risk of forum/jurisdiction shopping”. This may even deprive sports fans in some states of their right to engage actively on these online fantasy sports platforms, it says.

Through the report, the government’s thinking is clear. There is a space in which these online games can exist. But, while some states have already banned it, the Rajasthan and Punjab high courts have ruled that these are games of skill (and hence legal). But the final judicial verdict on these games is awaited and with this report it is clear that there will not be a country-wide ban by the government. And if some states start making money through these games, then the states like Assam, Odisha and Telangana, which have banned them, may have a rethink their decision.  If finally, the government goes by the report, then it will not be long before online betting becomes a reality because only a thin line divides fantasy and gambling. The authorities have banned Indians from betting on foreign betting companies using Indian credit cards and such illegal betting can then be stopped.

For every sector there is a regulatory body in India. But what can a regulatory body do to a gaming site once permission is granted and rules are set? Soon another grey area will develop, this time between fantasy and real betting which these huge companies, awash in cash, are well placed to exploit.

All seems to be moving towards legalising betting which many economists too have suggested, since governments stand to make huge profits. Otherwise even now betting takes place illegally.

Related news: Fantasy gaming platform Dream11 wins title sponsorship for IPL-2020

But even before betting is legalised, there are online sites which can lead you to major international betting sites through links.  The most prominent among them is Dafa News which masquerades as a sports news website. Links to various betting sites under the title Dafabet are given on the right side. This site has its branding on the jerseys of most of the football clubs playing in the ongoing Indian Super League being held in Goa, showing that it has big plans for India. How the money transfer on this site actually works is not clear, though various rules for betting are given.

With BCCI president Sourav Ganguly , in clear conflict of interest, becoming the brand ambassador of Drem11 company by taking big money, and at least two such companies backing Indian cricket, it is almost impossible to ban these online games now. While a law should have been in place before these companies came up, there is no point in trying to regulate something which has become so big.  So all points to fantasy and online betting becoming reality soon.