Despite GST hurdles, India’s sports-tech industry to grow at 13% CAGR, hit ₹49,500 cr by FY29: FIFS report

Despite hurdles caused by the changes in the GST law, the sports-tech industry is expected to grow at a CAGR of 13% from ₹26,700 crore in FY24 to ₹49,500 crore by 2029, according to a report by the Federation of Indian Fantasy Sports (FIFS) released today.

The report, 'Beyond the Field: India's Sports Tech Revolution', developed with Deloitte, sheds the spotlight on India’s emerging sports-tech industry, saying the Indian Fantasy Sports industry, a part of the Fan Engagement sub-sector, is the largest contributor to the sports-tech industry in India, with revenues touching ₹9,100 crore in FY 24.

However, says the report, the ripples caused by the change in GST laws will expectedly cause a de-growth of 10% in FY25 and a reduced CAGR of 7% for FY24 to FY29, compared to the earlier forecasted CAGR of 30% for FY22 to FY27.

The government imposed 28% GST on online gaming in October 2023, imposing the high tax rates on the full-face value of deposits rather than on platform fees or winnings. The plunge in profit margins had affected the earnings of several companies and forced many to shut operations due to mounting losses.

"This degrowth is driven by a whopping ~50% hit on the FS companies’ margins as a result of companies absorbing the impact of increased GST. Further, the risk of retrospective taxation has made the investors wary of the sector with the investments going down by 90% in 2023 and no new investments being made in the sector in 2024," the report finds out.

The emerging fantasy sports industry comprises three sub-sectors -- fan engagement which comprises fantasy sports, sports gaming, and ticketing experience; sports data and analytics comprising sports data & analytics; and foundational technologies like cloud computing, 5G, IoT, social media platforms, and digital payment solutions.

Joy Bhattacharjya, Director General of FIFS says the sports technology industry in India is poised to unlock new levels of athletic excellence, fan engagement and overall growth in the sports industry. He also says that India must embrace the power of sports technology. "A viable tax regime, robust and progressive national-level regulatory framework, and industry-wide standards for responsible gaming will be key in unlocking the full potential of the FS industry.”

Prashanth Rao, Partner at Deloitte India says technology, especially with the advent of digital, is not only providing data for enhanced athlete performance but is also creating immersive fan experiences. "Fantasy Sports continues to be a key driver...the industry (is) expected to post a CAGR of 7% until FY29 and create 17,500 direct and indirect new jobs by FY27.” Rao also calls for a "progressive and supportive regulatory framework" for the momentum to be sustained. "While initiatives such as the Draft National Sports Policy 2024 are a step in the right direction, fostering innovation and ensuring long-term policy stability will be crucial.”

Notably, the sports technology sector is currently in its nascent stage in India, though major technology adoption in areas such as fan engagement, sports gaming, and data—and analytics-based decision-making is expected to lead to significant growth.