Fantasy sport, real money: Dream11 thrives on betting minus regulation

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Now you might be wondering why we would change the name of a person for just playing a game. It’ll become clearer as we go on.

Having an insight into the application

Headquartered in Mumbai, Dream11 was officially incorporated in 2007, but it was in 2012 that the company found its true calling, when Harsh Jain and Bhavit Sheth, the longest-serving directors in the firm, decided to pivot to a freemium fantasy cricket game on Dream11.com.

Now the leader in India’s fantasy sports space, Dream11 has grown from 2 million users in 2016 to over 20 million in 2018. It holds 90% of the market share with revenues going up from around Rs 83 lakh (~$114,245) in FY15 to Rs 62 crore (~$8.5 million) in FY17. This leap is nothing short of gargantuan.

Fantasy sports platforms allow users like Somani to act as owners of their own sports teams. On Dream11, he gets 100 credit points to make a team of 11 players in a match. A fantasy team can have players from both the competing teams and the performance of that virtual team is then based on how the real-life cricketers play in the match.

Points are then awarded for the players’ batting, bowling, fielding, economy rate, and strike rate. The team which scores the most points wins the tournament. Depending on the tournament structure, there can be a single winner to thousands, where the money from the pot is distributed as per the rank of a team.

Matches more fun now

Somani’s friend, Kiran Chawla (name changed), a 24-year-old sales executive at Amex, Gurugram, says that this makes watching the matches more fun because it gives a sense of having some skin in the game.

Once again, we had to change a name. And with reason. Because fantasy sport is very much in bed with betting. Even English comedian and host of HBO’s Last Week Tonight, John Oliver, thinks so. He dedicated an entire segment to fantasy sport where he drew parallels with traditional gambling games. Oliver starts to describe fantasy sport by saying that these are “the most addictive thing you can do on your phone, other than, perhaps, cocaine.”

Gambling, games where the outcome predominantly depends on chance, is one of the most restricted and harshly regulated industries in India. Only three places—Goa, Daman & Diu and Sikkim—allow casinos to operate within their jurisdiction.

Dream11 is also restricted to the Google Play Store. What then made it grow so fast in a country quick to narrow its gaze at all forms of sports betting?

A Punjab and Haryana High Court verdict.

Rejection of the complaint

An individual called Varun Gumber had lost Rs 50,000 (~$696) on Dream11 and had appealed to the court to initiate criminal proceedings against the site under the Public Gambling Act of 1867. The court rejected the complaint observing that it is a game of considerable skill. This is all that fence-sitting entrepreneurs wanted to hear. Harsh Jain acknowledges this in an ET interview; he says it kept their ‘Dream11 alive.’

Jain, also the chairman of the Indian Federation of Sports Gaming (IFSG), in an interview with Moneycontrol in June, noted that until September 2017 there were just 10 fantasy sports platforms in India. Today, there are over 70.

The growth of fantasy sport in India though has largely gone unnoticed. While venture capitalists are now starting to see this fast-growing market as a promising investment opportunity, the future for Dream11 and the like is uncertain as they operate in a regulatory grey area. No one knows how various state governments will view this going ahead.

We reached out to Dream11 for a meeting but the company declined. A detailed questionnaire also didn’t elicit a response.