All it took was 96 hours for a bill to become a law that would effectively wipe out the INR 20,000 Cr real money gaming industry in India.

In the consequent cacophony of job losses, uncertainty for founders and rush for a survival blueprint, resonate the woes of investors.

The real money gaming (RMG) industry has reportedly raised more than $2 Bn from venture capital firms with nearly 400 RMG startups collectively holding $15 Bn in investment value.

More than the shock, the investor community was shaken by its suddenness. “It was like a thunderbolt striking out of nowhere,” a senior partner at a growth stage VC fund with top gaming companies in its portfolio shared, refusing to go on record in this volatile situation.

But the government refused to agree.

“VCs knew this was an industry with issues. It is not an India-specific problem. Everywhere in the world, people are facing these challenges and grappling with them,” electronics and information technology minister Ashwini Vaishnaw was quoted as saying in the media last week.

“The legislation was not unexpected,” agreed Brijesh Damodaran, partner and investment manager at Auxano Capital that has funded esports gaming platform Lets Play Now, said.

“But no one in the investor ecosystem was certain of the swiftness with which Parliament passed the law.”

Real money gaming saw investments peak during the pandemic with nearly $1 Bn pouring in between 2020 and 2022 across 75 funding rounds. But, after the GST levy in 2023, the funding tap ran dry, slowing down VC investments to $40 Mn from nine rounds. In the impact of heavy taxation, some users migrated to illegal and offshore platforms that continued to operate and advertise in 2024.

Higher taxes and stricter regulations did throw up some hiccups, but the sector regained its momentum soon. With more than 500 Mn digital gamers today, India’s $3.7 Bn gaming industry is estimated to reach $9.1 Bn by 2029, according to the India Gaming Report 2025.

Top gaming firms like Dream11, Mobile Premier League (MPL), Games 24×7, Winzo and Zupee raised most of their funding through the years of boom and VCs like PeakXV Partners, Orios Venture Partners, Tiger Global, Elevation Capital, Beenext, Alpha........

© Inc42