Summary
- Games24x7 lays off 400 employees in response to India’s real-money gaming ban, a move shaking up the startup ecosystem and demonstrating the importance of regulatory risk management for founders and investors.
- The article examines how the government’s new rules disrupted business models, job markets, and investment flows, providing actionable insights and key lessons for Indian entrepreneurs and digital professionals.
- Readers of Startup INDIAX will gain trusted, expert-backed advice on navigating future regulatory shocks, diversifying strategies, and seizing new opportunities in the digital and gaming landscape.
Table of Contents
Introduction
The recent move by My11Circle parent company Games24x7 to lay off 400 employees following India’s real-money gaming ban has sent shockwaves through the startup ecosystem. This sweeping government action, aimed at regulating online gaming, has not only caused immediate job losses but has also threatened the future of one of India’s fastest-growing digital sectors. For startup founders, entrepreneurs, and digital professionals, this event offers critical lessons on navigating regulatory risk, business model resilience, and innovation strategy. In this article published by Startup INDIAX, discover what happened, why it matters, and how startups can prepare for a volatile policy landscape.
Games24x7 Lays Off 400 Employees: What Happened?
Games24x7, the parent of My11Circle, laid off around 400 employees due to the Indian government’s ban on real-money gaming platforms. This marks the company’s second major layoff in 2025 after already cutting jobs earlier due to regulatory pressures. The ban targets paid games involving entry fees or monetary wagers including popular fantasy sports and skill-based games like rummy and poker. The timing was especially harsh because Games24x7 had just posted impressive revenue growth, but had yet to turn a profit due to prior tax burdens and operational losses.
Why Did the Real-Money Gaming Ban Trigger Layoffs?
The ban abruptly ended Games24x7’s core revenue source — fantasy and skill-based games with cash rewards. With the model now deemed illegal, the company needed steep cost cuts to survive, prompting the layoffs and a pivot toward less profitable free-to-play offerings. Other major startups like MPL and PokerBaazi faced similar layoffs.
How Does This Affect My11Circle and the Indian Startup Ecosystem?
For My11Circle, a fantasy sports property, the shutdown led to entire divisions being axed as tournaments and cash contests halted overnight. Beyond Games24x7, hundreds of thousands of Indian startups, from customer service agents to software engineers, face uncertainty as the wider ecosystem scrambles to shift business models or pursue international markets.
What Are the Immediate Impacts on Indian Startups?
Layoffs swept across the sector, with several companies cutting up to 60% of staff. Employees scrambled for new jobs, while investors worried about massive capital write-offs. Many companies completely shut real-money operations and pivoted to advertising-driven or subscription-based models.
How Are Investors and Employees Responding?
Venture capitalists face heavy losses; over ₹25,000 crore in foreign capital and roughly $2B in VC investments are now at risk. Employees, both direct and indirect, are uncertain about salaries, career growth, or redeployment to adjacent segments like esports or AI fan engagement. The layoffs sparked a hiring freeze across related tech roles.
Which Other Startups Are Affected?
Alongside Games24x7, MPL (Mobile Premier League) and PokerBaazi have announced mass layoffs, while smaller gaming, payment, and regtech startups face closure or drastic pivoting. This ripple effect could impact 400+ companies and thousands of indirect jobs.
The Economics: What Did the Industry Lose?
How Big Was the Real-Money Gaming Market?
Before the ban, India’s real-money gaming (RMG) industry contributed more than ₹31,000 crore (US$3.8-4.5B) in annual revenues, dominated by fantasy sports, poker, and rummy. Startups in the sector were valued at over $15 billion, supporting upwards of 200,000 direct and indirect jobs.
What Revenues, Jobs, and Investments Vanished?
Industry estimates suggest that up to ₹20,000 crore in annual tax revenue and ₹25,000 crore in foreign investment may evaporate, alongside the projected loss of 200,000 jobs. This disruption also triggered a collapse in user engagement, with game app downloads plunging by 60-95% across leading brands.
Key Lessons for Founders and Entrepreneurs
How Can Startups Manage Regulatory Risk?
The crisis highlights the critical need for startups to track regulatory changes closely and build flexible business models that can survive major shocks. Legal teams and proactive compliance strategies should be priorities to anticipate and influence policy.
Should Business Models Rely on Legal Ambiguity?
Relying on regulatory grey areas is a huge risk, as recent events proved. Startups should avoid building entire businesses around uncertain legal frameworks. Diversification and contingency planning are essential to mitigate sudden regulatory reversals.
Why Does Diversification Matter Now?
Startups that diversified into international markets, free-to-play games, or ad-driven revenue have survived better. Approaching growth with diverse product offerings and geographic reach reduces dependence on any one regulatory regime.
The Road Ahead: Where Should Startups Pivot?
What Opportunities Remain After the Ban?
Esports, sports analytics, fan engagement platforms, and non-monetary online games have emerged as viable alternatives under clearer regulatory frameworks. Startups are also exploring international expansion to offset losses in India.
Is Esports, Sports Tech, or Free-to-Play Gaming the Future?
Many industry experts see esports and sports tech as growth engines, with monetization shifting from cash prizes to advertising, content sponsorship, and creator economies. Free-to-play formats, while less lucrative, remain an accessible entry point legally and for new users.
Voices of Industry Leaders and Experts
What Are Leading Founders and VCs Advising?
Harsh Jain, CEO of Dream11, describes the ban as a “knockout punch,” urging reallocation of talent to AI, sports analytics, and creator technologies. Industry bodies call for fair, stable regulation and stronger government-industry dialogue to rebuild trust and investor confidence.
Expert Quotes on Regulatory Risk and Resilience
Analysts caution that monetization struggles make sustaining costs difficult, leading to inevitable layoffs. VCs advise startups to “future-proof” by anticipating regulatory shifts and building diversified models.
Conclusion
The Games24x7 layoffs following the real-money gaming ban offer a sobering lesson: regulatory risks can upend business models overnight. Indian startups must prioritize adaptability, legal vigilance, and diversification to survive in a volatile environment. Share your thoughts, join the conversation on Startup INDIAX, and explore more expert insights to future-proof your startup journey.
FAQs
Q1: Why did Games24x7 lay off 400 employees?
Due to the Indian government’s ban on real-money gaming platforms, Games24x7 lost its core revenue streams, forcing large-scale layoffs to reduce costs.
Q2: Which other companies were impacted?
Companies like MPL and PokerBaazi also laid off hundreds of employees, while smaller startups faced closures.
Q3: What lessons should startups learn?
Startups must diversify, closely monitor regulations, and avoid overdependence on legally ambiguous models.
Q4: Are there growth opportunities post-ban?
Yes, esports, sports tech, free-to-play, and international market expansions offer legal growth opportunities.
Q5: How has the ban affected the broader startup ecosystem?
The ban caused significant investor pullbacks, job losses, and ecosystem uncertainty, impacting India’s digital economy.
