Dream11 parent won't fight Indian government over real-money gaming ban, says co-founder Harsh Jain

Dream Sports CEO Harsh Jain

Dream Sports, the parent company of fantasy sports major Dream11, does not plan to challenge the constitutional validity of India's new gaming law, co-founder Harsh Jain told Moneycontrol in an interview on August 25.

"I think the government has made it clear that they don't want this right now. I don't want to live in the past. We want to focus entirely on the future and not fight with the government on something that they don't want," Jain said in an interview.

This is despite 95 percent of the group's revenues and 100 percent of its profits originating from cash-based contests. Dream Sports had reported an operational revenue of Rs 6,384.49 crore for the financial year 2023 (FY23), up from Rs 3,841 crore in FY22.

India's new gaming law prohibits online money games, which are games where a user makes a deposit, directly or indirectly, with the expectation of earning winnings on that deposit.

Following the passage of the legislation in Parliament, Dream11 halted all paid contests on its fantasy sports platform on August 22 and shifted entirely to free-to-play online social games. The law subsequently received the President’s assent and has now become an Act.

Jain's comments come amid speculation that several real-money gaming (RMG) companies are considering legal action to challenge the constitutional validity of the new gaming law in the forthcoming weeks.

In a recent interview with Moneycontrol, Union IT Minister Ashwini Vaishnaw had also said that he "surely" expects legal challenges to the new law.

Earlier this month, the Supreme Court reserved its judgment in clutch of cases dealing with both GST levied on gaming companies as well as state-level legislation which sought to ban some real-money online games. The apex court has to adjudicate the validity of GST show cause notices worth Rs 2.5 lakh crore issued to online RMG firms and casino companies, as well as challenges to laws introduced by Tamil Nadu and Karnataka that had banned online games played for stakes.

"We do believe regulation was the correct way forward, but we understand that this is not something that the government wants and we've always been a law-abiding company," Jain said.

Jain said they operated its current business model- prior to the recent legislation- for the last 14 years and scaled it to over 260 million users, as it was constitutionally protected and approved by the Supreme Court of India. "If the government has decided that they don't want it and they've passed a bill through parliament and made it an Act, and this is a new law, we want to abide by that," he said.

"Now, if for whatever reason, the law changes (again) or regulations come in, which allow us to continue with that business model, then the law is telling us you're allowed to do it again. Today, the (current) law stands," he said.

Going back in time, Jain believes that the industry could have worked harder to come together and self-regulate even more.

In March this year, the Federation of Indian Fantasy Sports (FIFS), of which Dream11 is a founding member, along with other real-money gaming industry bodies, the All India Gaming Federation (AIGF) and the E-Gaming Federation (EGF), announced that they had jointly adopted a ‘Code of Ethics’ to ensure consistent user safety standards across the industry.

The industry bodies had stated that the framework was based on global best practices and aims to implement responsible gaming and advertising policies.

This includes measures such as age-gating, adopting stringent KYC (Know Your Customer), and enabling user-set spending limits and self-exclusion. It also mandates annual third-party audits and comprehensive reporting mechanisms to ensure accountability and transparency.

Jain believes the move may have come a “little bit too late.”

"We were all waiting for a regulator to come. But maybe we should have been harder on ourselves to regulate this as an industry and not just wait for the government to appoint a regulator," he said.

Founded in 2008 by Jain and Bhavit Sheth, Dream Sports was last valued at $8 billion when it received $840 million by way of funding from a clutch of funds led by Falcon Edge, DST Global, D1 Capital, Redbird Capital, Tiger Global, TPG and Footpath Ventures in November 2021.

Apart from Dream11, Dream Sports also houses brands such as sports content and commerce platform FanCode, sports experiences platform DreamSetGo, mobile game development unit Dream Game Studios, and its philanthropic arm Dream Sports Foundation.