India’s online wagering market is experiencing rapid growth, with an annual growth rate of over 20% (Sportskeeda). This has made it an attractive market for global operators and B2B suppliers, especially considering India’s rapid economic development. Since 2009, India’s GDP per capita has doubled, and there are over 370 million bettors in the country (MyBetting India).
The Indian cricket wagering industry alone is estimated to be worth US$150bn (£122.32bn/€139.30bn), with approximately 85% of Indian bettors placing wagers on cricket (GiiResearch). The major wagering events in cricket for Indian bettors are the Indian Premier League and ICC Men’s T20. One popular fantasy sports business in India is Dream11, which offers fantasy cricket, football, basketball, and hockey, among other sports. With an impressive user base of 160 million active users, Dream11 reached a valuation of $8bn in November 2021, making it India’s first fantasy sports unicorn in 2019. This significant growth showcases the immense potential of the Indian market, which should attract marketing affiliates interested in the wagering and gaming industry.
Regarding the legal status of wagering in India, only three states, Daman, Goa, and Sikkim, have officially legalized it. The absence of specific legislation covering online wagering activities in the Information Technology Act (2000) and India’s original wagering legislation, the Public Gaming Act (1867), has created a grey area in terms of the legal status of wagering in the country. However, the government acknowledges the potential tax revenue generated by the growing interest in wagering among the middle class and is considering a new gaming bill to replace the outdated Public Gaming Act.
In India’s gaming market, popular casino games include traditional ones like blackjack, poker, roulette, and slots, as well as local games like Teen Patti and Andar Bahar. Major international operators, such as Bet365 and Betway (owned by Super Group), have established a presence in India. Flutter, an international operator, invested in Junglee Games, an Indian gaming business focused on rummy, a card game with a rich history in India spanning over 400 years. With Flutter’s operational expertise and global scale, there is potential to expand Junglee Games’ product offering, including its recently launched DFS (daily fantasy sports) product. Flutter also has an option to acquire the entirety of Junglee Games by 2025, demonstrating its commitment to international growth and leadership position in the industry through both organic growth and acquisitions.
In terms of B2B business opportunities, a key factor for operator profitability is customer acquisition cost (CAC). In most markets, a few large-scale operators generate the majority of profits due to their low CAC and operational efficiencies. Flutter, which is our only publicly listed B2C investment, has outperformed its peer group in the past 12 months, with a 64% performance increase compared to -19.5% median performance of peers, as of 3 March 2023. While the Indian wagering industry presents growth potential, operators must navigate various challenges. One major challenge is the lack of regulatory clarity, leading to uncertainty for operators and investors. The introduction of the Indian government’s new gaming bill increases the risk of regulatory crackdowns or changes that could impact businesses. Despite this uncertainty, the Indian wagering industry offers substantial opportunities for successful operators and B2B suppliers. With a population exceeding 1.3 billion people and a growing middle class, the demand for online wagering and gaming services is substantial. As the Indian government progresses towards industry regulation, there will be even more opportunities for operators and suppliers to establish themselves in the market and benefit from the growing revenue opportunity.
For media updates, follow our Twitter account (@waterhousevc) or visit our website at WaterhouseVC.com. Please note that the above information about Flutter, Bet365, Betway, and Super Group is based on publicly available information and should not be considered financial product advice.
