Fantasy gaming platform Dream11, facing challenges from increased taxation and regulatory hurdles in the Indian real-money gaming sector, has registered a significant milestone by adding 5.5 crore new users to its platform in 2023. This growth comes amid a taxing period for the industry, with the GST council imposing a 28% GST on real-money gaming and ongoing regulatory scrutiny.
Key Highlights:
- User Base Expansion: Dream11’s user base now totals 21 crores, with the addition of 5.5 crore new users last year, showcasing resilience in the face of regulatory challenges.
- Demographic Insights: A substantial portion of the new users, particularly from the 25-60 age group, joined the platform. Additionally, 28% of the users came from the top 115 Indian tier I and II cities.
- Female User Growth: Dream11 reported a remarkable 79% year-on-year growth in female users, indicating a broadening user demographic.
- Performance Metrics: Over the course of 2023, users created approximately 1,000 crore fantasy sports teams, highlighting the engagement and activity level on the platform.
- Payment Method Trends: UPI emerged as a preferred payment method, with 62% of surveyed gamers favoring it over credit cards (7%). The platform recorded 150 crore UPI transactions during the year.
- Previous Milestone: In October 2023, Dream11 celebrated reaching 200 million (20 crores) registered users, indicating sustained growth.
Industry Challenges and Response:
- Regulatory Challenges: The gaming industry faced a challenging period in 2023 with heightened regulatory scrutiny and the imposition of a 28% GST on real-money gaming by the GST council.
- Funding Decline: Funding in the gaming sector witnessed a significant decline from $576 million in 2022 to $209 million in 2023 until November, according to Inc42 data.
- Show-Cause Notices: Several gaming startups, including Dream11, received show-cause notices from the Directorate General of GST Intelligence (DGGI) for alleged tax evasion, contributing to industry-wide challenges.
- Operational Impact: The sector’s challenges led to layoffs and temporary halts in operations for some startups, reflecting the industry’s struggle.
- Dream11’s Response: Dream11, responding to the new taxation regime, shut down its corporate venture capital (CVC) arm, Dream Capital. The company challenged the show-cause notice in the Bombay High Court.
In Shorts:
Despite the challenging landscape for online gaming, Dream11’s ability to significantly expand its user base reflects its resilience and strategic responses to industry challenges.
