The hard reset: Six months after the ban, real-money gaming firms try to rebuild from zero

Six months since the government ban took effect in October last year, the companies that once collectively handled thousands of crores in transactions are in disarray. Many have shut down, some are dealing with ongoing enforcement actions, and a handful have pivoted, attempting to rebuild across categories such as stockbroking, microdramas and free-to-play games. But so far, none has matched what was lost.

India’s gaming industry was estimated to be worth around $6 billion in 2024-25, according to consulting firm Redseer, with real money (RMG) contributing roughly 71% of total revenue.

The sector was dominated by a handful of players, such as Dream11, Games24x7, Gameskraft, Mobile Premier League, Zupee, WinZO and PokerBaazi, who offered real-money formats such as fantasy sports, rummy and poker. Dream11 had over 250 million users, while WinZO had over 200 million, Zupee over 150 million, and Games24x7 about 120 million.

The sector had also attracted significant investor interest, with Tiger Global, Peak XV Partners, DST Global, Falcon Edge, Matrix Partners and WestCap Group among the backers. Over the past five years, global investors had poured in at least $2.8 billion into India’s RMG market, backing rapid user growth and strong monetization.

All of that came to a grinding halt when the Indian government passed the Promotion and Regulation of Online Gaming Act, 2025, effectively outlawing formats that involved entry fees and cash rewards.

Before the ban, the model was straightforward. Users paid entry fees to participate in contests or games, a portion of which was redistributed as winnings, while the platform retained a commission of around 10-20%.

“If you look at the Indian gaming industry over the last decade, what really monetized was real-money gaming,” says Nitish Mittersain, managing director of Nazara Technologies, which had exposure to RMG through its investment in Moonshine Technology, the parent company of PokerBaazi. He added that in RMG the conversion rate of paying users as a percentage of overall users was around 15%, while it is around 0.5% for games that rely on in-app purchases.

It is this monetization element that made RMG the dominant part of Indian gaming.

However, even before the ban, regulatory pressure had been building. A long-running dispute over how online gaming should be taxed remains before the Supreme Court. The government has argued that platforms should pay 28% goods and services tax (GST) on the full value of deposits, rather than on the platform fee they retain. Companies have challenged this interpretation, particularly its retrospective application, which could expose the industry to liabilities estimated at ₹2–2.5 trillion.

At the same time, enforcement actions have intensified scrutiny. Companies such as Gameskraft and WinZO have faced investigations into alleged financial irregularities, including money laundering, with their bank accounts being frozen, while others have secured interim relief.

Against this backdrop, even the largest companies are being forced to rebuild from scratch, betting that the user base they built through real-money gaming will follow them into new formats.

Before the ban, fantasy sports was not just the company’s largest business, it was effectively its only meaningful source of revenue. That business had scaled significantly. The company reported consolidated revenue of 7,374 crore in 2024-25, with gross gaming revenue, or platform fees collected from users, at ₹10,284 crore. It had been consistently profitable from 2019-20 through 2023-24, before reporting a loss of ₹479 crore in 2024-25, largely due to one-time tax and Esop-related costs rather than a deterioration in the underlying business.

What has followed is a rapid restructuring of the company into multiple parallel bets.

“We are essentially behaving like a portfolio of startups now,” Jain says, adding that each business has been given a runway of 18 to 24 months as the company deploys past profits to build new verticals.

Dream Sports’ most visible bet is its watch-along product, Dreamland, which allows users to join live streams during matches, interact with creators, and engage socially while watching games.

The early signals are promising. The company saw around 25 million users during the T20 World Cup and is targeting 50 million during the ongoing IPL season, though Jain cautioned that the behaviour is still nascent.

Other verticals include sports travel platform DreamSetGo and its sports streaming and commerce business Fancode, as well as newer bets such as Dream Money, an AI-led wealth management product, and Dream Street, a stockbroking platform that the company plans to launch by the end of this month.

At PokerBaazi, the reset has been more direct. “It took a couple of days to just digest what had happened,” says co-founder Puneet Singh. “Then it was back to the drawing board.”

The company has since pivoted to a non-real-money version of poker, and more broadly to casual gaming. It took the team a couple of months to revamp the product as it moved from monetary incentives to an engagement-driven model.

PokerBaazi, which laid off around 270 employees, has moved to a subscription-led model, priced at roughly ₹400 a month, alongside in-app purchases. The company reported revenue of ₹530 crore in 2024-25.

“It took us almost 13 years to reach that level,” says Singh, adding that the company is also exploring international markets. “Now we have to go and do the grind again from scratch.”

If PokerBaazi reflects a product-first rebuild, Nazara Technologies represents a more insulated bet that still faced the impact of regulatory shifts.

Nazara, which publicly listed in 2021, had historically stayed away from real-money formats, focusing instead on esports, casual gaming and global acquisitions. “We were taking a generally conservative view on not operating in regulatory grey areas. But real-money gaming companies kept becoming bigger,” says Mittersain.

In 2023, the government clarified how GST would be applied to RMG. For Nazara, this appeared to signal a move towards clearer regulation.

“We felt that if the direction was towards positive regulation, we may miss the boat completely. That’s why in 2024 we took the call to invest a large amount in PokerBaazi, because they were market leaders and we felt that if this played out well, they could create immense value for our shareholders,” says Mittersain.

Nazara acquired a 47.7% stake in PokerBaazi’s parent for ₹832 crore in September 2024. However, it did not consolidate revenue, treating the investment as what Mittersain described as an “option value”.

Following the ban, the company wrote down its investment, taking a one-time impairment that pushed it into a net loss of over ₹900 crore in the second quarter of 2025-26. It remains an investor in PokerBaazi.

For others, the transition has been more chaotic. Zupee is experimenting across multiple categories, including microdramas, astrology and free-to-play games.

However, an employee described the current phase as one where the company is trying multiple approaches without a clear long-term direction. “We don’t know if any of these verticals will scale, or even be viable in the long term,” he says.

The company declined to respond to requests for official comment.

While the new formats have brought in users, something is still missing: money.

“Real-money gaming had a very different monetisation profile. Now, you are dependent on scale, retention and time spent,” says Jain.

At PokerBaazi, the shift has required rethinking how users are monetised altogether. The company’s subscription model reflects one such attempt, but it requires users to see value in gameplay and experience rather than the possibility of winning money.

At Zupee, the company is also trying subscriptions for ad-free games and unlimited access to its micro dramas. The company acquired AI startup Nucanon last November for AI-based storytelling, and has reportedly acquired Mumbai-based microdrama startup Vertical TV.

While the shows and free games have found early takers, the scale is still small.

Since the ban, the company’s revenue has plunged, reflecting the difficulty of replacing real-money formats with engagement-driven products.

“Real-money gaming masked the lack of original Indian IP and deep game-making capability. The ecosystem became overly dependent on incentives and payouts rather than storytelling, design quality, and gameplay,” says Vishal Gondal, founder of Indiagames, among the country’s first gaming companies.

He is currently co-chair of the Indian Game Publishers and Developers Association (IGPDA). “With RMG out of the picture, India has the opportunity to reset and focus on building real games made in India, rooted in Indian culture, and capable of competing globally.”

For much of the past decade, the presence of money created a built-in incentive for users to participate, spend and return. That reduced the need for companies to invest heavily in gameplay depth, content ecosystems or community-driven engagement.

PokerBaazi’s Singh agrees. “When there is no money to be made, and it is purely for entertainment, you need to build a lot of recreational features to keep them engaged,” he says.

Singh added that the company has introduced features such as in-game interactions, content integrations such as “poker TV”, and private tables for social play. “We are competing with the likes of Netflix because users have limited time and have to choose between casual gaming, OTT or Instagram.”

Apart from direct money incentives, RMG companies were also heavily spending on marketing to acquire and retain users at scale. In 2024-25, for instance, Dream11’s marketing expenses crossed ₹3,900 crore, while PokerBaazi spent over ₹460 crore. Zupee’s outgo exceeded ₹800 crore in 2023-24, according to data from Tracxn. The company has not disclosed its 2024-25 numbers yet.

These companies are now trying out frugality. “We did everything we could to cut down expenses,” says Jain, adding that Dream Sports cut back on marketing, advertising and consulting spends, and even moved offices to reduce rental costs by roughly 30%. “Now, our only expense is on people.”

But it has been tough to keep employees who were used to a different type of scale and growth motivated.

“As founders, we have to make sure we keep the team as aligned as possible and show them what the next phase of growth looks like,” says Singh. “This is the biggest struggle right now, to keep the team together and prepare for that.”

IGPDA’s Gondal says the pivots away from RMG were necessary. “These pivots force companies to build real games, real engagement, and real communities instead of relying on transactional mechanics. Not every company will survive this transition, but that is healthy,” he adds.

India still has a large base of gamers. But it is still not clear what type of games will make them open their wallets.

“You cannot ignore the fact that India has 500 million gamers,” says Nazara’s Mittersain. “The opportunity is still very large, but the question is what kind of products will be able to capture that opportunity.”

However, Dream Sports’ Jain says these questions are moot until the Supreme Court delivers its verdict to settle the long-running dispute over the taxation of online gaming. Given the high stakes, with total potential exposure for the industry estimated at ₹2–2.5 trillion, companies are worried.

Jain says the unresolved tax issue has been hanging over the industry like Damocles’ sword. “If the verdict is against us, the industry will obviously go through an existential crisis because that sum was not even payable when we had our old business running. Now, it’s impossible because that business has shut.”

If the verdict is favourable, it could ease the immediate financial overhang on the industry. But the larger challenge of rebuilding a viable business without real-money gaming will remain.