Fantasy sports platforms in India cumulatively paid a sizable sum of INR 445 crore in goods and services tax (GST) in FY20, according to a whitepaper released by non-profit IndiaTech.
The total taxes paid by fantasy gaming firms rose 2.6 times compared to INR 166 crore paid in FY19, the study revealed.
The tax deducted at source (TDS) on winnings also jumped 170 per cent to INR 250 crore during FY20, as against INR 93 crore in the previous fiscal year.
The phenomenal growth of fantasy sports in India has also attracted wealthy foreign investors - widely considered as an indicator of a successful industry.
The whitepaper disclosed that, between 2018 and 2019, foreign direct investment (FDI) in the fantasy gaming industry was to the tune of INR 1,500 crore.
"In the last few years, fantasy sports has certainly become a potential sector that has performed exceptionally well and boosted the consumption of sports in India,” said Rameesh Kailasam, CEO of IndiaTech.
As a result of the accelerated in-flow of capital, thousands of job opportunities have opened up in the fantasy gaming sector.
Online fantasy sports companies increased their headcount to 3,400 employees in FY20 from 2,800 in the previous fiscal.
The report further sheds light on the ratio of users playing free or paid contests.
As much as 80 per cent of the active users opt for free contests, while the remaining engage in a pay-to-play format.
A whopping 98 per cent of the paid users who participated in the pay-to-play format have either won or lost less than INR 10,000 net in the last three to four years.
“Most of the people engaging in an online fantasy sports platform are looking for entertainment rather than monetising their fantasy sports experiences. A small chunk of the participants that are paying-to-play are not putting huge sums of money into a contest.
“This aspect of fantasy sports is critical to understand to be able to establish the distinction between online fantasy sports and other forms of games that involve monetary considerations," Kailasam added.
Kailasam also believes that there is a need to consider fantasy gaming as an expertise-driven action to further boost the expansion of the fantasy sports market.
"There are multiple perception issues the industry has to overcome to reach its full potential as a non-addictive and skill-based platform," explained Kailasam.