Online Gaming Law Wipes Out Unicorn Status of Four RMG Startups

India’s real-money gaming (RMG) industry has faced a major setback following the government’s newly introduced regulations on online money games. According to the ASK Private Wealth Hurun India Unicorn and Future Unicorn Report 2025, at least four gaming startups — including fantasy sports leader Dream11, Games24x7, Gameskraft, and Mobile Premier League (MPL) — have lost their unicorn status.

These firms, once valued at over $1 billion, are now grappling with regulatory restrictions, a decline in investor confidence, and shrinking growth prospects.

What is a Unicorn Startup?

Unicorns are privately held startups valued at $1 billion or more. India has been one of the fastest-growing unicorn hubs globally, with sectors like fintech, e-commerce, and SaaS leading the race. However, the recent law targeting online real-money games has drastically impacted valuations of gaming startups that once dominated the sector.

Gaming Giants Hit by Valuation Decline

Among the companies most affected are:

• Dream11: Once India’s biggest fantasy sports company with 260 million users, it was a flagship unicorn in the gaming ecosystem.

• Games24x7: Known for its rummy and fantasy gaming platforms, the company had over 120 million users.

• Gameskraft: With 30 million users, it was a rising force in online card games and skill-based platforms.

• Mobile Premier League (MPL): A household name with 90 million users, MPL was one of the fastest-growing startups in the real-money gaming sector.

In addition, Zupee and Winzo Games, though not unicorns, also saw their valuations slump.

New Online Gaming Law Reshaping the Industry

The turning point came last month when Parliament passed a bill banning all forms of online money games while promoting eSports and social gaming.

Key Highlights of the Law:

• Ban on advertisements for money games.

• Restrictions on financial transactions, with banks and institutions barred from processing payments related to money gaming.

• Stricter taxation policies, further adding to the financial burden on companies.

This move, according to experts, has led to reduced revenues, declining user acquisition, and shrinking investor interest in RMG startups.

Impact on Real-Money Gaming Startups

The immediate aftermath of the new law has been severe:

• Marketing cutbacks: Companies scaled down ad spending and halted high-profile sponsorships, including those tied to the Indian cricket team.

• Workforce layoffs: Many firms laid off a significant percentage of their employees to reduce costs.

• Investor confidence shaken: Venture capital funding slowed down as uncertainties loomed over the future of RMG in India.

Despite these challenges, analysts believe the new rules could build greater trust and stability in the long run by clearly distinguishing regulated gaming from gambling.

India’s Unicorn Club Still Growing

Interestingly, while RMG valuations have suffered, India’s broader startup ecosystem continues to thrive. The Hurun report noted that 11 new startups joined the unicorn club in 2025, taking the total to 73 unicorns.

New Unicorn Entrants Include:

• Ai.tech

• Navi Technologies

• Vivriti Capital

• Veritas Finance

• Rapido

• Netradyne

• Jumbotail

• DarwinBox

• Moneyview

• Juspay

• Drools

India’s Most Valuable Startups

The report highlighted:

• Zerodha as India’s most valuable startup, valued at $8.2 billion.

• Razorpay and Lenskart tied for second place at $7.5 billion each.

• Bengaluru remains the top unicorn hub, with 26 startups worth $70 billion, followed by Delhi-NCR (12 startups, $36.3 billion) and Mumbai (11 startups, $22.8 billion).

Employment and Investor Insights

High-value startups — those valued at over $200 million — employ around 3.74 lakh people, with unicorns alone accounting for 2.06 lakh jobs.

Among investors, Peak XV Partners emerged as the most influential venture capital firm, backing 68 startups, including Groww, Turtlemint, and Oyo’s PRISM.

Rajesh Saluja, MD & CEO of ASK Private Wealth, summed up the trend:

“Amid concerns around cash burn, founders and investors are increasingly focusing on profitability, capital efficiency, and sustainable business models.”

Conclusion

The loss of unicorn status by Dream11, Games24x7, Gameskraft, and MPL signals a turning point for India’s real-money gaming sector. While stricter laws have created short-term challenges, they may pave the way for a more transparent and sustainable ecosystem. Meanwhile, India’s overall startup ecosystem continues to expand, underlining the country’s resilience and growing entrepreneurial strength.