The Indian government’s new law regulating money-based online gaming has shaken the startup ecosystem. Popular platforms like Dream11, Games24x7, Gameskraft, and Mobile Premier League (MPL) have lost their unicorn status, according to a report.
Why the Fall Happened
The report highlights that stricter rules and higher taxation on games categorized under gambling and winning-based formats have significantly disrupted their business models. Once highly attractive to investors, these startups are now battling regulatory scrutiny, reduced funding inflows, and declining user trust.
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Understanding Unicorn Status
A unicorn is a privately held startup valued at over $1 billion (₹8,300 crore). Dream11 and MPL were once key players in India’s booming gaming market, boasting massive valuations. However, after the new regulations, investor confidence dipped, and their valuations dropped below the billion-dollar threshold.
Bigger Picture: India’s Unicorn Count Still Rising
Despite the setback for gaming startups, India’s overall unicorn story remains strong. The number of unicorns grew from 67 to 73 this year, with 11 new entrants including Vivriti Capital, Navi Technologies, EdTech ventures, Rapido, NetrDiagnostics, Jumbotail, and Darwinbox. This indicates investor interest is shifting toward sectors perceived as more stable and less risky.
Expert Opinion
Cybercrime expert and former IPS officer Prof. Triveni Singh noted:
“Online gaming grew rapidly in India, but lack of transparency and financial risks were always concerns. The new law is a crucial step to safeguard consumers and curb irregular transactions. While some companies have suffered in the short term, the sector will likely become more transparent and reliable in the long run.”