Key Moments:
- India’s real-money gaming sector has written off more than Rs 70 billion ($840 million) and lost over 7,000 jobs amid regulatory uncertainty
- Estimated revenue losses have topped Rs100 billion ($1.2 billion), with a government tax shortfall of Rs56 billion ($670 million)
- Industry leaders and companies, including Flutter Entertainment (LSE: FLTR), have reported significant write-downs and operational halts following the imposition of a 40 percent GST
Mounting Financial Losses Across the Industry
India’s real-money gaming industry is grappling with unprecedented financial and operational challenges caused by regulatory uncertainty. Over Rs 70 billion ($840 million) has been written off and more than 7,000 positions have been eliminated due to delays surrounding the Promotion and Regulation of Online Gaming Act (PROGA), which has yet to be notified nearly three months after passage.
Recent industry estimates have placed revenue losses at more than Rs100 billion ($1.2 billion), while the government’s projected shortfall in tax collections reaches Rs56 billion ($670 million). Most of this turmoil has occurred even before formal enforcement of the law, with sector executives attributing the downturn to the anticipation and uncertainty of regulatory action rather than actual rule changes.
Taxation Changes Intensify Industry Pressure
A critical turning point came with the imposition of a 40 percent Goods and Services Tax (GST) on online money gaming from September 22. According to industry sources, this tax rate has led to a Rs100 billion revenue loss, a Rs36 billion reduction in GST collections, and a Rs20 billion decline in TDS and income tax contributions. The resulting financial pressure has left many companies fighting for survival amid the ongoing regulatory ambiguity.
Legal Perspectives on Delayed Notification
Technology and gaming lawyer Jay Sayta has raised concerns regarding the government’s continuing delay in officially notifying PROGA. While the legislative process was expedited, moving from cabinet approval to presidential assent in less than four days, the act remains unenforced nearly 90 days later. Sayta outlined that, “without this notification, penalties under PROGA cannot be legally applied, and banks remain free to serve gaming companies.” He cautioned that, “once notification happens, all current operations involving real-money gaming would have to halt immediately,” highlighting the prospect of additional industry disruption.
Corporate Write-Downs and Widespread Layoffs
Major companies have reported significant financial hits as a direct result of the uncertainty and regulatory shifts. Flutter Entertainment (LSE: FLTR) disclosed a $556 million impairment after its Indian unit, Junglee Games, suspended cash-based rummy, which substantially contributed to a $789 million net loss for the September quarter, versus a $114 million loss in the prior year. CEO Peter Jackson referred to this as “a sudden and unexpected regulatory shock.”
Nazara Technologies wrote down Rs9.15 billion ($110 million) on its stake in Moonshine Technologies, known for PokerBaazi, after revenue sources abruptly dried up. The impact extended to international investors as well, with Clairvest of Canada recording an unrealized loss of Rs7.6 billion ($92 million) on its holding in Head Digital Works. Delta Corp recorded Rs3.8 billion ($46 million) in write-offs across Deltatech, Head Digital Works, and OpenPlay Technologies.
| Company | Write-Down / Loss | Details |
|---|---|---|
| Flutter Entertainment (LSE: FLTR) | $556 million | Impairment after suspending cash-based rummy (Junglee Games) |
| Nazara Technologies | Rs9.15 billion ($110 million) | Write-down on investment in Moonshine Technologies (PokerBaazi) |
| Clairvest | Rs7.6 billion ($92 million) | Unrealized loss on stake in Head Digital Works |
| Delta Corp | Rs3.8 billion ($46 million) | Write-offs across Deltatech, Head Digital Works, and OpenPlay Technologies |
Cascading Effects on Fintech and Payments
The challenges have extended beyond gaming operators into the broader fintech industry. Paytm’s net profit reportedly declined by 98 percent after a Rs1.9 billion ($23 million) impairment related to First Games Technology. Meanwhile, Mobikwik registered an eightfold increase in losses, reaching Rs286 million ($3.4 million), accompanied by a 7 percent year-on-year drop in operating revenue. Data from the National Payments Corporation of India revealed a sharp decrease in UPI transactions connected to gaming, falling from 351 million in July to 270 million in August.
Industry Shutdowns and Uncertain Future
The aftermath of PROGA’s passing saw leading real-money gaming platforms, including Dream11, Mobile Premier League (MPL), Zupee, WinZO, and Gameskraft, pausing all cash-based game modes. Hike took further action by discontinuing its real-money gaming application, Rush.
Given the convergence of regulatory delays, heightened tax burden, sizable impairments, employment reductions, and suspended business activities, India’s real-money gaming sector presently faces a precarious outlook. Participants across the market continue to press for prompt clarification on PROGA’s notification to enable future planning in this significant market sector.
- Author
Daniel Williams
