Stock trading: Why Indians love playing fantasy sports online more than buying stocks

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Once called “dumb money” or derided as Robinhood investors who buy high and sell low, Dalal Street’s retail army has made its moves quite smartly over the past couple of years, even in the face of the REIT selloff and rate hikes. by central banks. Over the past two years, the number of active demat accounts has also jumped by around 120% and now over 9 million Indians have an active demat account.

However, given the number of participants, the rise of the retail investor on Dalal Street is overshadowed by the massive growth seen in fantasy sports. According to a recent Deloitte report, India is now the largest fantasy sports market in the world, with over 13 million registered users.

So what makes fantasy sports more popular than stock markets in India?

The Deloitte report states that only around 80% of fantasy sports users in India participate in “free competitions”, meaning they have nothing to lose even if their virtual team selection is disastrous.

“But investing in the stock market is not a fantasy game. Here, the profits and losses are real. Some manage to realize their dream while for a few others, making money in the stock market remains a pipe dream,” according to a report from the brokerage firm.

Securities.

For the majority of stockbrokers, futures and options (F&O) trading is the single largest segment of their retail brokerage revenue. “No wonder the proportion of inactive customers rises rapidly as soon as markets go through tough times and things get tough,” the report said.

Predicting the outcome of a sports match is speculation because it depends on chance, but forming your own team and participating in fantasy sports is not. Various courts have issued judgments stating that creating a virtual team is the key to success in a fantasy sports contest and it requires skill and understanding of the game.

The growth of fantasy sports in India has been founded on the love of sports and the need for fans to feel involved. “While the opportunity to compete and win prizes is intended to reward participants who have, over time, leveraged their knowledge and acquired skills, the opportunity to win prizes should not be seen as the primary motivator. of their participation on such platforms,” ​​said Deloitte. report.

On the other hand, investing or trading in stock markets is all about making money, whether in the short or long term.

Ventura Securities says that the journey of a fantasy sports player is somewhat linear, but that of a stock market investor is not to the same degree. “It’s much easier to acquire a customer in strong market conditions when the sentiment is bullish. However, his further progress depends on his previous experience and level of understanding of the markets and associated risks.

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