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.

Federation of Indian Fantasy Sports

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