IFSG releases survey on fantasy gaming’s impact on sport consumption

The Indian Federation of Sports Gaming (IFSG) released a new survey on how fantasy sports participants follow real life sporting activities much more actively as compared to non-fantasy gaming players.

The custom study conducted by Nielsen for IFSG, titled ‘Fantasy Sports: Measuring its impact on actual sports consumption’ interviewed 1169 respondents in major cities such as Delhi, Mumbai, Pune, Kolkata, Ahmedabad, Chennai, Bangalore, and Hyderabad. Out of the total sample size of 1169, 566 respondents were fantasy sports players and 603 respondents were non-fantasy Sports players.

It was found that 37% of fantasy sports players consume more than 6-8 hours of real-life sports content per week to stay abreast with knowledge on players and match conditions. The figure for non-fantasy sports players spending 6-8 hours consuming sports content is 8%.

Out of the 566 respondents from metro areas who are fantasy sports players it was revealed that 78% respondents follow the match live by tracking it through an online scoreboard or using online apps while 66% follow cricket players and team news online so that they understand which players are performing well.

The survey also revealed that almost 100% of the respondents follow cricket, while football is the second most tracked sport, with 40% fantasy sports players and 43% non-fantasy sports players tracking the sport.

The study also noted that almost 99% of fantasy sports players and 86% non-fantasy gaming participants are aware about Dream11, while the second most followed fantasy gaming brand is MyTeam11, which 45% fantasy and 34% non-fantasy players are aware about.

Commenting on the findings of the IFSG study, Anwar Shirpurwala, CEO of IFSG said, “India is a sports loving nation. Alongside cricket which remains our most watched sport, we are witnessing increased viewership of sports like Kabaddi and Hockey as well as the advent shorter format sports leagues like IPL, Indian Super League (ISL), Pro Kabaddi League (PKL).

The fantasy sports platforms are enabling casual fans to engage with the sports they love becoming core sports fans. The growth of the online fantasy sports gaming platforms is resulting in a growth in the viewership of various formats of sports. The findings validate the strong potential of Fantasy Sports in contributing to the growth of sports ecosystem of India.”

Business Gaming

Online skill gaming companies face questions about manner of GST payments

As per a report in the Economic Times today,  the tax department has started questioning some of the leading online  skill gaming companies, including Dream11, to ascertain if there is a revenue leakage on account of the methodology used by these platforms to calculate and pay Goods and Services Tax (GST).

The indirect tax department is ascertaining whether GST is applicable on the total value of the transaction, i.e. the amount put in by the players for a particular game or the commission/platform fees retained by gaming companies for facilitating the transaction.

As of now, most online skill gaming companies have taken the view that GST is payable only on the commission/platform fees retained by them and the amounts put in by the players need not be subject to GST.

According to tax officials, more than half a dozen gaming companies have been questioned by the department, but the matter is currently under examination and no demand notices have been sent to any companies. In May last year, indirect tax officials had also raided the Jaipur office of fantasy gaming website MyTeam11 for allegedly not paying GST on the amounts collected by them.

The Indian Federation of Sports Gaming (IFSG) has made a representation to the Finance Ministry, GST Council and other authorities for clarity on the issue.

As per Rule 31A of the Central Goods and Services Tax Rules, 2017, the value of supply of actionable claim in the form of betting, gambling or horse racing is 100% of the face value of the bet.

Online skill gaming companies however believe that since their activities fall under the ambit of ‘games of skill’, they cannot be categorised as gambling or betting, and consequently this rule does not apply to them. They are further paying tax at the rate of 18% under ‘other services’ and not under the 28% tax bracket of gambling, betting or lotteries.

Commenting on the issue, Harsh Jain, CEO and co-founder of Dream11 told ET, “We pay GST on the gross consideration collected by our platform and not on our margins. Levying GST on user deposits would mean that it’s paid only once when users make their deposits and not every time they play in our contests with t heir winnings as well, which is when Dream11 provides a service to them. This is the same practice followed globally in every mature GST-following country. GST for online gaming companies is charged on their Gross Gaming Revenue,”

Tax experts from leading audit and consultancy firms however believe that there is a possibility of litigation on the issue due to the manner in which the GST Rules have been drafted. They further state that tax authorities are likely to closely scrutinise the issue in the near future.


MyTeam11 becomes official co-presenting partner of Pakistan Super League

Discovery Group’s DSport television channel has announced that it has roped in Jaipur-based real money fantasy sports platform, MyTeam11, as the official broadcast co-presenting partner for the Pakistan Super League (PSL) T20 tournament.

The fourth season of the tournament will be played across six cities in UAE and Pakistan from 14th February-17th March, 2019 and will be broadcast on DSport channel.

Commenting on the partnership, MC Venkatesh, managing director of Lex Sportel, the channel management partner of DSport noted,  “Fantasy sports is a necessity for any sport and league to grow as it’s a natural extension for the fans to stay engaged to their favourite sport even after the live action is over. My Team 11 with their recent associations has only showcased the growing interest and increasing fan engagement in fantasy cricket and hence it was but natural for us to get them on board as the broadcast partners for the Pakistan Super League.

The league has a huge following in India and the fact that last year it was India’s second most watched T20 league is a testimony to its popularity. I am happy to welcome My Team 11 as our Broadcast Partners and I am confident that the Pakistan Super League will scale newer heights in viewership ratings.”

Sanjit Sihag, the chief operating officer of MyTeam11 added, “We are aiming at achieving international presence as a leading fantasy sports organization thus, the said collaborations. We believe our partnership with PSL can reap both the series and us, great results in terms of fan engagement.”

Besides PSL, MyTeam11 has in the past been a sponsor/partner for the Bangladesh Premier League, Pro Volleyball Series and the India New Zealand T20 cricket series. The fantasy sports platform has also retained retired cricketer Virender Sehwag as its brand ambassador.


MyTeam11 office searched for alleged GST evasion

The Directorate General of Goods and Services Tax Intelligence (DGGI) searched the offices of Jaipur-based fantasy company MyTeam11 Fantasy Sports Pvt. Ltd. (the company that operates online fantasy sports portal MyTeam11), for alleged Goods and Services Tax (GST) evasion and other irregularities.

As per media reports, officials of GST intelligence received specific information that My Team11 Fantasy Sports Pvt Ltd, Jaipur is not paying GST on the amount collected by them through organisation of fantasy games.

According to regional news reports, GST authorities have claimed that fantasy sports falls within the ambit of ‘betting’ under the rates prescribed under GST laws and therefore liable to be taxed at 28%. Further, they claim that tax has to be paid on the entire amount deposited by the customers and not just on the rake or commission collected by the company.

“During the course of search, My Team11 has voluntarily deposited Rs 1.53 crore in anticipation of their GST liability which comes to Rs 7.0 crore as per the preliminary inquiry. Further investigation in this case is under process,” a DGGI official told the media.

Officers of DGGI seized various records and documents from MyTeam11 offices during their search operations conducted on 24th May.

Fantasy sports and other skill game operators have argued that games of skill being outside the ambit of gambling, it would fall within the category ‘all other services not specified elsewhere’ and consequently will be liable to a 18% tax rate.