Hike Shuts Down as india’s Real-Money Gaming Sector Faces regulatory Crackdown
New Delhi – Messaging app Hike, once valued at $1.4 billion, is shutting down its real-money gaming (RMG) vertical following a recent crackdown by the Indian government on online gaming involving financial risk. The move comes as a wave of disruption sweeps through India’s RMG industry, impacting major players and triggering significant job losses.
The shutdown of hike’s gaming operations underscores the escalating regulatory challenges facing the sector. In August 2023,the Indian government imposed a 28% Goods and services Tax (GST) on the full deposit value for online gaming,alongside new regulations aimed at curbing problem gambling. This followed a series of state-level bans and legal challenges, creating an increasingly uncertain surroundings for RMG companies. the crackdown is forcing companies to reassess their business models, explore alternative revenue streams, or exit the Indian market altogether.
Following the new regulations, industry leaders dream Sports and Mobile Premier League (MPL) initiated the closure of their real-money gaming businesses in India.Some are diversifying into areas like micro-dramas (Winzo) and financial services (Dream Sports), while others are seeking opportunities in international markets.
The impact extends beyond company strategies, with approximately 2,000 jobs lost across the industry at companies including Games24x7, Head Digital Works, MPL, and Zupee. sources indicate some firms are considering workforce reductions of up to 90% as they navigate the changing landscape.
Venture capital firms that invested in these startups are reportedly questioning founders about potential early warnings of regulatory action and the lack of proactive mitigation strategies, according to sources familiar with the discussions. The future of the RMG sector in India remains uncertain as companies and investors grapple with the evolving legal framework.