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Mobile Premier League (MPL), a gaming platform backed by Peak XV, has decided against challenging the Indian government's newly enacted online gaming law. This law effectively imposes a blanket ban on real-money games, a significant blow to the burgeoning online gaming industry in India. According to sources familiar with the matter, MPL has not only opted out of legal action itself but has also advised the All India Gaming Federation (AIGF), of which it is a member, to refrain from pursuing a legal challenge. Instead, MPL is reportedly encouraging the AIGF and its members to concentrate their efforts on free-to-play gaming models. This stance has been confirmed by an MPL spokesperson to Moneycontrol, a financial news outlet. This decision comes in stark contrast to Head Digital Works, the operator of the online rummy platform A23 Rummy, which has already filed a petition in the Karnataka High Court challenging the legality of the Promotion and Regulation of Online Gaming Act. This makes A23 Rummy the first company to mount a legal challenge against the new law. The contrasting approaches highlight the divided opinions within the industry regarding the best course of action in response to the ban. Several other prominent gaming companies, including Dream11 parent Dream Sports, Gameskraft, Zupee, and PokerBaazi parent firm Moonshine Technology, have also reportedly decided not to challenge the law, aligning with MPL's strategic decision. The AIGF, a prominent industry body, has over 120 members, representing a significant portion of the online gaming ecosystem in India. Some of its key members include MPL, Nazara Technologies, Gameskraft, and Zupee. The core of the new law lies in the prohibition of online money games, where users are required to make a deposit, whether directly or indirectly, with the expectation of earning winnings based on that deposit. This broad definition has effectively crippled the real-money gaming segment, forcing companies to reconsider their business models and explore alternative avenues for revenue generation. Following the passage of the bill in Parliament on August 22, real-money gaming companies, including MPL, promptly suspended contests and games involving monetary transactions on their platforms. However, these companies have continued to offer free-to-play options, attempting to retain their user base and maintain engagement while navigating the new regulatory landscape. MPL, founded in 2018 by Sai Srinivas and Shubh Malhotra, offers a diverse portfolio of over 60 free-to-play games across various categories, including board games, card games, puzzle games, and casual games. These games are available on both Android and iOS apps. The company claims to have a substantial user base of over 90 million registered users spread across Asia, Europe, and North America, demonstrating its global reach and significant market presence. MPL achieved unicorn status in September 2021, after raising $150 million, bringing its valuation to $2.3 billion. This funding round significantly boosted the company's growth and expansion plans, solidifying its position as a leading player in the online gaming industry. In the financial year 2023-24, MPL experienced a 22 percent increase in revenue, reaching $130 million. The company also achieved breakeven with an adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) of $0.2 million, indicating improved financial performance and operational efficiency. While primarily focused on the Indian market, MPL also has a significant presence in North America, Africa, and Europe. Approximately 31 percent of the company's revenues in FY24 were generated from international markets, highlighting its growing global footprint and diversified revenue streams.
MPL's decision to abstain from challenging the new online gaming law is a calculated strategic move that reflects a pragmatic assessment of the regulatory environment and the potential costs and benefits of engaging in legal battles. Several factors likely contributed to this decision. Firstly, legal challenges are often time-consuming and expensive, requiring significant financial resources and management attention. The outcome of such challenges is also uncertain, as the courts may ultimately uphold the government's law. Given the potential for protracted legal proceedings and the risk of an unfavorable ruling, MPL may have concluded that it is more prudent to focus its resources on adapting to the new regulatory framework rather than fighting it. Secondly, the government's stance on real-money gaming appears to be firm, with a clear intention to regulate the industry and protect consumers from potential harms associated with gambling. This strong regulatory push may have discouraged MPL from pursuing a legal challenge, as the company may have perceived a low probability of success. Thirdly, MPL's decision may be influenced by its investors, who are likely to prioritize stability and long-term growth over risky legal battles. Investors may have advised MPL to comply with the new regulations and focus on developing sustainable business models that do not rely on real-money gaming. Fourthly, the potential reputational damage associated with challenging the government's law may also be a factor. MPL may be concerned that engaging in a legal battle could alienate regulators, consumers, and other stakeholders, potentially harming its brand image and long-term prospects. By choosing not to challenge the law, MPL can maintain a constructive relationship with the government and demonstrate its commitment to responsible gaming practices. Instead of engaging in legal challenges, MPL is focusing on free-to-play gaming models, which are not affected by the new law. This strategic shift allows the company to continue operating in India and retain its user base while adapting to the new regulatory environment. MPL is also exploring opportunities in international markets, where real-money gaming is permitted. This diversification strategy reduces the company's reliance on the Indian market and mitigates the impact of the new law. The company's decision to advise the AIGF to focus on free-to-play games reflects a broader industry trend. Other gaming companies, such as Dream11 parent Dream Sports, Gameskraft, Zupee, and PokerBaazi parent firm Moonshine Technology, have also decided not to challenge the law, suggesting a consensus within the industry that compliance is the most prudent course of action. This collaborative approach may also be influenced by the desire to avoid fragmenting the industry's efforts and presenting a united front to the government.
The Indian online gaming industry is at a critical juncture, facing significant regulatory headwinds and uncertainty. The new online gaming law has fundamentally altered the landscape, forcing companies to adapt their business models and explore alternative revenue streams. The long-term impact of the law on the industry remains to be seen, but it is likely to lead to significant changes in the competitive dynamics and the types of games that are offered to consumers. MPL's decision to comply with the law and focus on free-to-play gaming models is a significant development that could shape the future of the industry. Other gaming companies are likely to follow suit, leading to a shift towards more skill-based games and innovative monetization strategies that do not rely on real-money gaming. The success of free-to-play gaming models will depend on the ability of companies to create engaging and entertaining games that attract and retain users. Companies will need to invest in high-quality content, innovative gameplay mechanics, and effective marketing strategies to succeed in this competitive market. The new law also presents opportunities for companies to develop new types of games and services that cater to the evolving needs and preferences of Indian consumers. For example, companies could focus on developing games that promote skill development, education, or social interaction. The government's intention in enacting the new law is to regulate the industry and protect consumers from potential harms associated with gambling. However, the law has also been criticized for being overly broad and potentially stifling innovation. Some industry experts argue that a more nuanced approach is needed, one that differentiates between games of skill and games of chance and allows for regulated real-money gaming in certain circumstances. The government may need to consider revising the law in the future to address these concerns and ensure that the industry can continue to grow and create jobs. The online gaming industry has the potential to contribute significantly to the Indian economy, but only if it is regulated in a way that promotes innovation and protects consumers. The government and industry stakeholders need to work together to create a regulatory framework that fosters sustainable growth and ensures that the benefits of online gaming are shared by all. The coming years will be crucial for the Indian online gaming industry as companies adapt to the new regulatory landscape and explore new opportunities for growth. MPL's decision to comply with the law and focus on free-to-play gaming models is a significant step in this direction, and it will be interesting to see how the industry evolves in response to the challenges and opportunities that lie ahead.
Source: Gaming platform MPL won't contest real-money gaming ban