Over fifteen months after the Centre imposed a 28 percent goods and service tax (GST) on online gaming, Games24x7’s co-founder and co-CEO Trivikraman Thampy says that the company is better situated to navigate the new tax regime compared to the previous year.
His optimism comes on the back of stellar growth in Games24x7’s real-money gaming (RMG) offerings – particularly fantasy sports.
“We are definitely better positioned (compared to the previous year). The new regime has been tough, not just for us but for the industry as a whole. While we have had a good year in 2024, it has not been easy. But we have learnt a lot about how to operate our business in this very high tax regime, and are hopeful that 2025 will be a year of meaningful growth for us,” Thampy told Moneycontrol.
Founded in 2006 by Thampy and Bhavin Pandya, Games24x7 is one of three gaming unicorns – companies valued at over $1 billion – in the county, aside from Dream11 and Mobile Premier League (MPL). The company currently has a user base of over 120 million players.
Games24x7 operates a portfolio of skill-based real money gaming platforms, including RummyCircle (Online Rummy), My11Circle (Fantasy Sports), and PokerCircle (online poker).
RMG to drive growth
According to Thampy, fantasy sports will be its biggest driver of growth in 2025, despite the heavy tax burden on RMG. In February last year, My11Circle became the official partner of the Indian Premier League (IPL), outbidding rival Dream11 to secure the rights. The firm shelled out as much as Rs 125 crore annually for a period of five years.
"For us, fantasy sports has been a major growth driver. Last year, we secured the IPL sponsorship rights for the next five years. At this point, for almost everyone in the company, outside of the people solely dedicated to RummyCircle, the singular focus is to make the IPL (2025) a spectacular success,” Thampy said.
My11Circle reported an over 60 percent year-on-year increase in revenues and number of teams created on the platform during IPL 2024.
Games24x7 is also working on “new user experiences” and product innovations in the realm of real money gaming, expected to be launched this year, Thampy added.
The company’s efforts in the RMG space, especially fantasy sports, have fared better than the wider industry, which has suffered from aftershocks of a heightened tax regime.
The Centre, on October 1, 2023, imposed a 28 percent blanket tax on online gaming, which has dealt a debilitating blow to the margins of RMG firms. In fact, the year-on-year (YoY) growth rates went down significantly in the past few months for real money gaming, primarily driven by a decline in revenues of fantasy sports.
Revenue earned by fantasy sports platforms through commissions on user contest fees dropped to Rs 8,800 crore in 2024, down from Rs 11,000 crore in 2023, according to a recent report by market research firm Redseer.
Technology investments
Games24x7’s growth plans also encompass an ongoing effort by the firm to establish itself as a “technology platform.” A big step towards this aim is the decision to invest in startups beyond the gaming sector in India.
On Friday, the company announced the cohort for its ongoing accelerator program, TechXpedite, featuring 17 startups from across the country. Launched in October 2024, the program received more than 330 applications for startups across three focus categories: gaming, Artificial Intelligence (AI), and impact-driven inclusive technology.
The selected firms will be offered a “comprehensive support ecosystem”, including masterclasses, networking opportunities, guidance from industry experts, and credits worth over $500,000 from more than 30 technology partners.
The accelerator program will run in tandem with Games24x7’s corporate venture fund, Games24x7 Ventures, which was launched in November 2022 with a corpus of Rs 400 crore. Investments through the fund had taken a pause due to the new tax regime, but will soon restart, Thampy said.
“The two programs end up naturally being synergistic. But that is more of a by-product rather than being intentional. For our venture fund, we are looking at a bit later stage companies – seed or series A in some cases, while TechXpedite is more for more pre-seed investments,” he clarified.
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