Real money gaming ban wipes out PE firm Clairvest’s Rs 760 crore stake in Head Digital Works

Head Digital Works operates platforms such as A23 Rummy, A23 Poker, and Cricket.com, and says it has 70 million registered users across its offerings.

Canadian private equity firm Clairvest has written off its entire investment in real money gaming (RMG) company Head Digital Works, having a carrying value of Rs 760 crore (Canadian Dollar 120.9 million) as of June 30, after the new gaming law imposed a blanket ban on online money games.

Carrying Value of an asset on the balance sheet is calculated as original cost minus accumulated depreciation, amortization, or impairment.

"Based on our negative experience with Head Digital Works and other recent experiences investing abroad, we intend to concentrate our investing in North America going forward. We remain focused on staying closer to our proven investment strategy to deliver long-term value for our shareholders,” Clairvest CEO Ken Rotman said in a statement.

Clairvest’s financials showed that the company has recorded an unrealised loss of Rs 760 crore (C$120.9 million) as a result of the regulatory development, reducing the carrying value of its investment in HDW (Head Digital Works) to nil.

Clairvest’s bet on Head Digital Works

Clairvest first backed Head Digital Works - previously known as Head InfoTech - in 2018 by investing $73.7 million for an 87 percent stake. Head Digital Works runs platforms such as A23 Rummy, A23 Poker, and Cricket.com, and claims to have had 70 million registered users across its offerings.

The Hyderabad-based firm had also acquired Deltatech Gaming, the RMG unit of the casino and hospitality giant Delta Corp, for around Rs 491 crore in a cash-and-stock deal in February 2025. Deltatech Gaming operates Adda52, one of India's oldest online poker platforms.

In October, Delta Corp said that it has written off Rs 378.34 crore in investments tied to Deltatech Gaming, Head Digital Works and Openplay Technologies on a standalone basis, and Rs 459.52 crore on a consolidated level.

When did Head Digital Works suspend RMG?

Head Digital Works, along with all other major RMG companies, shut down their RMG operations in August after the Centre’s new online money law.

The firm also laid off nearly 500 employees, or over two-thirds of its workforce, Moneycontrol had reported in September.

The company has challenged the constitutional validity of the new online gaming law, and the matter is pending before the Supreme Court with the next hearing slated for November 26.

How Head Digital Works write-off impacts Clairvest

Clairvest has said that the write-off generated a loss of C$8.55 per share on a pre-tax, pre-carry basis and reduced the aggregate carrying value of its investee companies by C$97.5 million. It also led to the firm reporting a net loss of C$76.8 million for the quarter ended September 2025.

For the six months ended September 30, 2025, the net loss stood at C$55.4 million, primarily due to the C$127 million provision for the Head Digital Works investment and a net increase of C$35 million in the valuation of the other private equity investments held by Clairvest.

Firms hit by RMG ban

Earlier today, global betting giant Flutter Entertainment announced that it has taken an impairment charge of $556 million (around Rs 4,932 crore) tied to Junglee Games shutting down its real-money gaming business in India.

This resulted in Flutter Entertainment posting a net loss of $789 million in the third quarter of 2025, a significant increase from $114 million loss in the same quarter last year.

On November 12, diversified gaming and sports media company Nazara Technologies also took a one-time impairment charge of Rs 914.7 crore on its investment in Moonshine Technologies (PokerBaazi).

The move resulted in the company reporting a loss of Rs 33.9 crore for the quarter, marking its first loss-making quarter since going public in 2021.

Earlier this month, fintech major Paytm also saw its consolidated net profit drop 82.9 percent to Rs 21 crore for the quarter ended September 2025, after taking an impairment charge of Rs 190 crore on loans extended to its gaming joint venture First Games, which has also been hit by the new law.