Gaming Ban Fallout: Mass Layoffs, Mega Gateway Sky8Pay Cripples, Fintech Grapples

New Delhi, September 3, 2025 – The blanket ban on realmoney online gaming, now a formal law, has triggered a cascading collapse across the gaming and fintech ecosystems. From gaming giants to payment processors, the shock has been swift and unprecedented.

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1. Industry in Crisis: Shutdowns & Massive Job Losses

Major Platforms Hit Hard

• Dream11, MPL, PokerBaazi, My11Circle, Zupee, WinZO, Probo, Games24x7, GamesKraft, 99Games, KheloFantasy, Adda52, and Paytm First Games have all halted realmoney gaming operations in compliance with the new law.
• Dream11, allegedly India’s largest fantasy sports operator, lost 95% of its revenue overnight.

Layoffs and Human Impact

• MPL is laying off about 60% of its India workforce—roughly 300 of 500 employees—a decision confirmed via internal communications.
• Games24x7 and Baazi Games are cutting about 50% of their staff.
• Thousands of professionals—over 2,000—are reported to be actively seeking new jobs, per staffing firm CIEL HR.
• Across the industry, more than 200,000 jobs in over 400 companies are estimated to be at risk.
• Families are being plunged into crisis; in one Mumbai account, an employee recalls being told “it took me 10 years to find some stability… now this kind of uncertainty is impossible to explain”.

Economic Fallout

• Industry groups warn of potential revenue loss of around ₹20,000 crore annually in GST and taxes.
• The broader ecosystem—advertising, content creation, tech services—faces significant downturns.
• FDI valued up to ₹25,000 crore is under threat.

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2. Sky8Pay’s Collapse: From HighVolume Gateway to TSP Pivot

At the heart of realmoney gaming payments stood Sky8Pay, the largest gateway handling up to ₹200 crore in daily transactions. The ban obliterated its core revenues, leading the company to make an immediate staff reduction of 80%, dropping from 450 to just 100 employees. Sky8pay is fully owned by Streamline Money.

Mr. Rishi Wadhwa, CEO of Sky8Pay, summed up their predicament:

“In less than a fortnight, our RMG volumes went from industry-leading highs to a trickle,” said Rishi Wadhwa, CEO, Sky8Pay. “At peak, Sky8Pay processed up to ₹200 crore a day for regulated platforms. The ban has forced us to right-size by 80% and retool as a TSP with banks so we can flag and block suspicious gaming transactions in real time while protecting genuine payments. It’s a painful reset, but we’re committed to helping the ecosystem transition responsibly.”

This shift means Sky8Pay now plans to work closely with banks as a Transaction Service Provider, focusing on flagging and blocking any suspicious realmoney gaming transactions.

Sky8Pay also aims to focus more on its existing clients from Utility, Ed. Tech & E-com marketplace sector as it has completely stopped processing payments and its services to Gaming companies.

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3. Payment Gateways, Banks & Fintech: A Shock to the System

• Realmoney gaming contributed between 15–20% of total volumes for many payment processors—and up to 40–50% for some.
• Gateways like Razorpay, PayU, Cashfree, Paytm, Easebuzz, and PhonePe are now scrambling to fill the revenue void.
• Some gateways, such as Razorpay and Cashfree, claim minimal impact due to diversified portfolios.
• Yes Bank, however, faces the greatest exposure—estimated to have facilitated 60% of RMG flows via nodal accounts.
• Experts warn volumes may migrate to unregulated grey channels, including offshore platforms and crypto, escalating compliance risks.

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4. The Law, Penalties & Pushback

Regulatory Framework & Penalties

The Promotion and Regulation of Online Gaming Bill, 2025, passed in Parliament by late August and signed into law around August 22, imposes a categorical ban on all realmoney online games—including those based on skill or chance.

• Operators or facilitators can face up to 3 years in prison and fines of ₹1 crore.
• Advertising violations carry up to 2 years in jail and ₹50 lakh fine—repeat offences attract stiffer penalties and are non-bailable.
• Importantly, banks and gateways are themselves subject to prosecution for processing or routing RMG payments.

Industry Pushback

• The All India Gaming Federation (AIGF) and others petitioned Home Minister Amit Shah, warning of revenue and job losses totaling ₹20,000–23,000 crore annually, and potential player migration to illegal platforms.
• Karnataka IT Minister Priyank Kharge slammed the ban as short-sighted, citing risks to jobs, innovation, and national security.
• Gaming startup A23 has filed the first legal challenge in the Karnataka High Court, calling the ban unconstitutional for including skill-based games.

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5. 29 August: Banks & FinTech Meet

On 29 August, a strategic meeting between banks and fintech players took place to align on enforcing the new regulations. Discussions focused on transaction monitoring, compliance retooling, and mechanisms to block or flag suspicious gaming-related transactions.

Representatives from major payment gateways and banking partners attended, laying groundwork for the pivot to regulated transaction flow oversight and implementing the role of TSPs like Sky8Pay.

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6. Kerala’s Response: Clarifying Tax Landscape—not Defying Ban

While the central government’s law stands firm, Kerala is taking a parallel path focused on clarification rather than defiance.

The Kerala government has enacted an Ordinance to amend the State GST Act, explicitly detailing GST liabilities on online gaming, gambling, and horse racing. This move intends to remove legal ambiguity and ensure consistent taxation—but does not signal opposition to the realmoney gaming ban itself.

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In Conclusion

India’s abrupt ban on realmoney gaming has reshaped the landscape in mere weeks. Established firms like MPL and Dream11 are laying off staff by the hundreds, while Sky8Pay—the linchpin of gaming payments—is shedding 80% of its workforce and reinventing itself as a TSP for banks. Payment ecosystems and fintech platforms are scrambling to adjust to a world without RMG flows, amid rising compliance risk. The law brings punitive measures, but also resistance—through legal challenges, industry petitions, and state-level policy interventions. As the dust settles, the path forward for India’s gaming and fintech sectors hangs in the balance.

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Govt engagement continues

On September 1, IT Minister Ashwini Vaishnaw held the first post-ban meeting with gaming stakeholders, signalling continued engagement on user-money protection and an orderly transition to the new regime. Officials have also indicated openness to amendments that clarify categories and address edge cases.