Rolling dice on tax changes: Investor interest in real-money gaming sours At a time when the margins of Indian real-money gaming (RMG) companies have hit the skids due to the new goods and services tax (GST) norms on online gaming, investor interest in RMG has soured.

Investors say that they are now looking to take measured bets in non-cash categories like casual and mid-core games.

“In RMG, the regulatory environment today is not the best. Therefore, as an investor, it is easier to wait it out and not pour additional capital into the sector today,” said Kshitij Sheth, MD, ChrysCapital, a late-stage investment firm, at the Indian Gaming Conference (IGC).

Sheth said that the lack of clarity and uncertainty in taxation has hurt investor interest in RMG. ChrysCapital has made investments in companies like Dream11.

India currently has three companies valued at over $1 billion, including Games24x7, Mobile Premier League, and Dream11.

With RMG firms in hot water, investors are now looking towards other gaming categories like casual and mid-core games, according to Salone Sehgal, founding general partner, Lumikai, a gaming-focused venture capital fund.

“We are seeing breakouts happen with young companies in other forms of gaming such as advertising (ad)-based, eSports, etc, which for us is very interesting. As an investor, that is where the opportunity lies,” Sehgal said.