IPL 2023 to drive fantasy sports companies to ₹2,900-3,100 crore revenue, fueled by Tier-2 cities and exciting prizes

• IPL 2023 is expected to boost the revenue of fantasy sports companies to ₹2,900-3,100 crore.
• Growth in fantasy sports platforms will be driven by increasing adoption in tier-2 cities.
• Tier-2 and beyond cities account for over 80% of the user base.

Fantasy sports companies like Dream11, My11Circle, MPL are set to receive a huge boost due to the ongoing Indian Premier League (IPL) 2023. These companies are expected to earn a gross gaming revenue of ₹2,900-3,100 crore in 2023.

According to a report by Redseer Strategy Consultants, the fantasy sports market has grown due to increased awareness of fantasy sports among people and increased marketing efforts by new companies.

The gross gaming revenue of fantasy sports companies is expected to increase by 30 to 35%, taking it to ₹2,900-3,100 crore during 2023. The report predicts that the average revenue per user (ARPU) will increase from ₹410 during IPL 2022 to ₹440 per user during IPL 2023.

In 2022, fantasy sports companies earned a gross gaming revenue of ₹2,260 crore, up from ₹1,460 crore in 2021, registering a growth of 55%. In 2022, IPL recorded a viewership of 400 million TV viewers.

In 2022, 50% of the transacting users were from tier-2 cities and 31% from tier-3 and beyond cities. Metro cities and tier-1 cities contributed just 8% and 11%, respectively.

Tier-2 cities to drive growth

According to Ujjwal Chaudhry, the growth in the fantasy sports segment will be driven by increased adoption in tier-2 cities across the country and the cross-migration of users from other games.

Increasing internet penetration in tier-2 and beyond cities is also expected to provide a push to the industry. Over 80% of users reportedly come from tier-2 and beyond cities.

“Steep growth in fantasy sports gaming will come from tier 2 cities driven by increasing adoption of fantasy platforms and cross-migration of users from other games. Increased internet accessibility will give a push to the IPL economy,” said Chaudhry, partner, Redseer Strategy Consultants.

Government’s regulations to boost transacting users

The Indian government’s decision to formulate rules and regulations for Goods and Service Tax (GST) on real money gaming (RMG) platforms and Google allowing fantasy sports platforms on its Play Store will also help in increasing transactions during IPL 2023.

“There has been an increase in efforts to make platforms more secure and reliable for the users. Measures like RNG certification, secure payment gateways, and fraud security, increase user trust in the platforms, and subsequently build confidence in the users to spend higher amounts on gaming,” said Saurav Kumar Chachan, director, Redseer Strategy Consultants.

Prizes like Audi cars and Mahindra Thar push users to spend more

In 2022, Dream11, a popular fantasy sports platform, offered its users rewards such as Audi cars during IPL 2022, and My11Circle, another fantasy sports platform, offered the Mahindra Thar as a reward during the 2022 World Cup. These rewards pushed users to deposit and spend more money to win these prizes.

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