Growing player numbers from 300,000 to 10 million in just two-and-a-half years may seem like an impossible goal for any business, but as Gaurav Assomull of fantasy sports platform LivePools explains, conditions in India are right for exactly that kind of expansion.
The continuing lack of regulated online gambling markets in all but two of India’s 36 states and union territories means there is a huge opportunity for operators offering fantasy sports games with cash prizes. The explosion in the popularity of T20 cricket driven by the big-hitting stars of the Indian Premier League has created strong demand for such games, while the rapid improvement in the availability of online banking has given a large section of the population the ability to play them.
Throw in a little help from US marine turned Instagram influencer Dan Bilzerian, and serial entrepreneur Assomull is confident he has a winning formula in place for LivePools.
Assomull, best known in India as the co-founder of successful infrastructure business Intergen Energy, is a sports fanatic and first became interested in fantasy games while growing up in the UK. Having made a number of investments in tech companies in recent years, he took what he had learned in the tech space and combined it with his knowledge of sports to launch LivePools with his brother Vickram in November 2017.
It now offers games based on T20 and ODI cricket, which are perfect for ‘skilled gaming’ as they provide the fast turnaround desired by players and allow the operator the chance to run a large volume of paid-for contests. Test cricket is not on the menu at LivePools though, as tying up players’ capital for five days does not make financial sense for a business that makes its money when players enter games.
While the IPL, India’s T20 internationals and the Big Bash are the most popular events, LivePools has also started to broaden its offer with kabaddi and football, including the Indian Super League, to help build its player base.
Payments technology and player numbers
One of the drivers behind Assomull’s decision to dive into the fantasy games arena in 2017 was that he saw a gap in the market, as player numbers in India were still relatively low. However, during the planning stage for LivePools, the market leader Dream11 began a fundraising round and entered a rapid growth phase that has seen it grow from six million players to around 70 million registered users and a valuation in the region of $2.5 billion today.
Despite that significant shift in market conditions, Assomull has every reason to be optimistic about the prospects for LivePools and has a clear growth strategy in place for the next few years.
“The journey started fairly slowly and we weren’t very aggressive at the beginning. In terms of growth, within the first 12 months we only, I say only, acquired 300,000 registered users. And from February 2019 up until July 30th we escalated and jumped to 1.2 million registered users,” he explained.
“We did a round of funding in January this year which enabled us to achieve these numbers and grow to where we are today. However, we certainly have the plans to achieve a minimum of 5 million users by the end of the IPL 2020 and 10 million registered users by the next IPL in 2021. That is the roadmap.”
The reasons Assomull can be confident about reaching those milestones stretch beyond his belief that LivePools have got their technology and game offers right. The changing face of the Indian economy means conditions are favourable for the whole fantasy games sector to expand quickly.
“You are looking quite comfortably at a $5 billion industry as things stand today, just based on revenue numbers from all the fantasy companies from the various sites there are. But I don’t think we’ve reached anywhere near full potential, we’ve just scratched the surface,” said Assomull.
“I don’t think it’s anywhere near maturing as yet, predominantly because the accessibility on a weekly basis, not even a monthly basis, that Indians have to mobile payments and credit cards is improving. A year-and-a-half ago, nobody had credit cards in tier 2 cities and tier 3 cities. Today there’s a big movement happening to enable online banking. Obviously, since demonetisation a couple of years ago, there has been a big emphasis on banking and how banking works.
“So as the tech space grows, as the payments space grows in India, as connectivity grows, I think the fantasy games industry will only grow. As things stand today you are looking at a $5 billion market at the very least, and I think this number can double as quickly as the next 12-24 months.”
That’s not to say that he believes growing the business will be easy or that he expects to make a fast buck. For Assomull, LivePools is very much a long-term project.
“There’s certainly potential. It’s one of the spaces in which you go all-in and see it through,” he said. “The tech space is not an easy space. It involves a lot of marketing, you recognise values only on LTVs of customers, which takes time. So it’s certainly a long journey ahead if you are really looking for a significant value.”
The influence of the Instagram’s Playboy King
One of the steps on that journey was to take a small investment from Bilzerian, a man nicknamed ‘Instagram’s Playboy King’ and famed for his depictions of a lavish lifestyle that most rock stars could only dream of. The deal that will see Bilzerian promote LivePools across his social media accounts is part of a clear plan to differentiate the brand from Dream11 and the other competitors in the Indian fantasy market.
“What’s interesting is that outside of the US, Dan’s second largest following actually comes from India. Out of his 40 million followers, he’s got 10 million followers in India. What it really does for us is give us as a brand credibility and recognition,” said Assomull.
“I think we’ll start to see further upsides over the course of the year when he starts posting about LivePools. He has a few deliverables from his side and as they happen, they should be something we can actually recognise in terms of numbers. But if you look on the PR side of things, the roadmap we are able to take with this is certainly something that is interesting to us and hopefully will be of common success.”
The sports betting opportunity … or lack of it
India is a market that major sports betting operators would love the opportunity to attack, but opportunities remain limited due to a legislative position that means online gambling is either illegal or unregulated in most of the country. Assomull is in no doubt that this position is helping to drive participation in fantasy sports.
“Yes, 100%. I think Indians are just like the Chinese, they’re called lucky customers, they love to play – gaming is part of their DNA,” he said. “Gambling being illegal in India, I think this is the closest thing to sports betting, shall we say, that they would probably get. That plays a big part in the appetite of our customers today, especially the recreational customers.”
The legal position has not deterred all international sports betting operators from trying their luck in India though and a quick Google search reveals a selection of out-of-territory operators advertising that they accept bets in rupees.
Assomull said: “There’s been a huge shift in the last 12 months and the large operators are there. How they are operating and what they are doing I’m not too sure, but they are very much there, transacting and investing.
“You see it today through programmatic marketing. I open up my laptop and suddenly I see pop-ups of various different brands encouraging me to sign-up and play, and marketing to me in Indian rupees. I think it’s a very, very similar stance to China, they’ve got experience in grey markets and are certainly giving it a go.
“It’s completely illegal. There’s no two ways about it. Some operators like to operate in grey markets and some don’t. Most of them do, they just operate under different brands, surrogate brands, but are very much taking on the Indian market.”
One issue he is less sure about is the prospects for regulated online sports betting markets being established by state legislatures. With even the usually forthright Indian Prime Minister Narendra Modi reluctant to indicate his position on the issue, it is difficult to get any indication of if or when laws will change.
“It’s a state-by-state issue, it’s not a central issue. It’s a bit like the US. Technically any given state could legalise gambling,” said the LivePools boss.
“I think there’s a higher chance of casino betting being allowed before sports betting. However, the smart thing I think for the Indian market would be to regulate sports betting, for the simple reason that the money and the numbers are so astronomical that if the taxation is done correctly, there’s a tremendous upside for the Indian government.
“But we don’t know. There’s a lot of speculation and people are anticipating a couple of years, three years, but at this stage there are no concrete answers. There are conversations going on about this and I’m sure that at the top levels, they do understand that betting does go on and that a huge offline market already exists.”
He would welcome any move to regulate and the lucrative opportunities that would open up for LivePools, but real money sports betting is not yet part of the business plan.
“If you look at, for example, DraftKings in the US and you look at their journey, I think there are huge synergies between fantasy players and potentially real casino players or real sports betting players,” said Assomull.
“If it were to regulate, it would be a no brainer for me to convert to the real money side. In terms of value, I think it’s an astronomical valuation that you’d probably pick up if you had 10 million players. Any of the big players would certainly look at you fairly seriously.
“I’m certainly not opposed to it, but it’s not the model that we are operating on right now in anticipation or hope. We continue business as usual; if it happens, it happens, but that would just be the icing on the cake.”