Sunday, October 2, 2022

Is Dream11 trying to create a monopoly through FIFS?

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Fantasy sports website Dream11 has been all over the news recently after it bagged the coveted title sponsorship for this year’s edition of the Indian Premier League (IPL).

While the news will certainly catapult fantasy sports and the issues surrounding it in limelight, Dream11 has also been silently working behind the scenes to ensure that it creates a monopoly in the fantasy gaming space and frames regulations that only benefit it.

Formation of Dream11 sponsored industry body FIFS

In the year 2017, Dream11 founded Federation of Indian Sports Gaming (FIFS), officially registered as Federation of Sports Gaming, a not-for-profit company registered under Section 8 of the Companies Act to ostensibly ‘work as a self-regulatory body’ to protect consumer interest and create standardized best practices in the fantasy sports industry.

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On its website, the federation boasts of being ‘India’s only Self Regulatory Organisation for Fantasy Sports Industry.’

Couched as an independent and neutral organisation that is interested in protecting the interests of all stakeholders including consumers, FIFS claims to have over 30 fantasy sports companies as its members and eminent personalities such as journalist and Delhi Daredevils COO Amrit Mathur; former Supreme Court judge AK Sikri and former DGP of Maharashtra AN Roy.

A closer examination of the organisation’s functioning however reveals that it has been setup to only cater to the interests of one company, i.e. Dream11.

As per regulatory filings made by FIFS to the Registrar of Companies, the organisation has two directors on its board- Harsh Anandkumar Jain and Bhavit Rajesh Sheth, the two founders of Dream11.

Further, if one looks at the shareholding pattern of FIFS, it is apparent that the organisation is owned entirely by Dream11, with the fantasy giant’s America-based parent entity, Dream Sports Inc. (earlier known as Dream11 Inc.) owning 99.99% of the shares, and co-founder Bhavit Sheth owning the balance 0.01%.

Flimsy claims of being a ‘neutral body’

FIFS touts to be the sole custodian of fantasy sports in India with over 30 companies as its members. If one delves deeper into the list of members, it is clear that some are inactive companies who are no longer in business while a few other members confirmed that they would not be renewing their association with the federation.

Interestingly, apart from Dream11 and a couple of other companies, most other members are unhappy with the high-handed attitude of the so called ‘board’ of the organisation (which comprises of no one else but the Dream11 founders).

Those in the know of things cite many instances where FIFS has used its so called ‘self-regulation charter’, a document, having no legal sanctity or backing but one which lays down the rules, regulations and format of conducting fantasy games, to arm twist legitimate operators to stop their activities.

For example, one of the members of FIFS, who is now going to leave the organisation claims that he was repeatedly called by the federation’s CEO claiming that he cannot run a fantasy league of a tournament conducted in an African nation that was approved by that nation’s government. FIFS office-bearers have threatened legal action against companies’ that do not follow their diktats.

Another instance quoted by some members relates to the Taipei T10 League conducted in Taiwan in May this year. FIFS issued an advisory to all its members saying that fantasy games cannot be conducted on the league as it is not authorised, which some smaller companies complied with the instruction.

However, once Dream11 decided to go ahead with conducting fantasy games on the league and thereafter this issue was never raised by FIFS.

It was on this restrictive attitude towards innovations and non-allowance of newer engagement tools in the FIFS charter that Starpick, one of the larger operators started by entrepreneur Trigam Mukherjee decided to exit the body last year.

Regulations needed for fantasy sports

With these strong-arm tactics adopted by FIFS to ensure a monopoly-like situation for Dream11 and its conventional draft fantasy format, it is clear that a proper regulatory framework is required for the sector from a credible and neutral organisation.

Out of a sector having more than 150 operators, FIFS has only been able to get around 30 companies as members (out of which a few are inactive and defunct ones), clearly indicating that more needs to be done to get all stakeholders together.

As per leading gaming company Nazara Technologies Limited’s CEO Manish Agarwal bodies like FICCI, CII and IAMAI can act as a bridge between the industry and the government.

It is high time that the government steps into frame regulations for the fantasy sports sector and consumers, operators and other stakeholders create a strong, robust and neutral body to take care of the interests of the fantasy sports sector, instead of having a body catering to only one company.

The writer is a veteran Indian Independent Journalist and has written on various top publication of India on Politics, Public Policy and Economics. He was previously UNI bureau chief.

Views expressed in the article are personal.

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