The share prices of online gaming companies are under severe selling pressure. The Nazara Tech share price and the share price of Delta Corp sold off significantly in early trade after the Cabinet cleared the online gaming bill. The Nazara Tech shares are down over 6% intra-day while Delta Corp stocks pulled back slightly after a similar decline in early morning trade.
This bill suggests banning all online games involving money and these include even games that are skill-based. The Online Gaming Bill is expected to be presented to Lok Sabha in a short while from now.
Nazara Tech’s Rs 800 crore investment in poker may see significant hit
Nazara Tech is expected to see the most significant hit given the Rs 800 crore investment in Poker Baazi. Jinesh Joshi, Research Analyst, PL Capital highlighted, “Prima facie all companies that deal with real money transactions are expected to be hit, as the Bill provisions indicate.”
He added that, “Nazara owns 48% in PokerBaazi, an online poker platform. Nazara had invested about Rs 830 crore in this venture and there were plans to further infuse Rs150 crore into the company by the way of CCPS. If online real money games indeed get banned, investment in PokerBaazi is at the risk of being written off. PokerBaazi forms 35% of our target SoTP EV of Nazara. Our current target price for the stock is Rs 1,345 and if we exclude PokerBaazi from our SoTP valuation matrix, revised target price comes to Rs 917 per share.”
What does the Online Gaming Bill propose?
The Online Gaming Bill, 2025, to be moved by Electronics and Information Technology Minister Ashwini Vaishnaw, seeks to establish a national-level framework to regulate the online gaming sector while prohibiting money games that operate across states or from foreign jurisdictions. However, the online gaming industry has raised alarm that the government’s proposed Bill seeking to ban all real money games, including those based on skill. According to the industry, this could result in massive job losses and closure of companies.
Online gaming industry worried about job loss
As per the latest report on ANI, the All India Gaming Federation (AIGF), E-Gaming Federation (EGF) and the Federation of India Fantasy Sports (FIFS) said that the Bill, if passed, would “destroy over 2 lakh jobs, result in over 400 companies shutting down, and weaken India’s position as a digital innovator.” The bodies stressed that the move would strike a “death knell” for a legitimate, fast-growing sector that has been contributing significantly to the economy.
According to the online gaming industry, online skill gaming is a sunrise sector with an enterprise valuation of over Rs 2 lakh crores, generating Rs 31,000 crores in annual revenue and contributing more than Rs 20,000 crores in taxes.
Online gaming industry estimated to double by 2028
As per the latest numbers, the online gaming industry has been growing at 20% annually on a compounded basis between 2020-2024. Industry projections see this number doubling by 2028. The number of online gamers in India grew from 36 crores in 2020 to more than 50 crores in 2024, while foreign direct investment in the sector crossed Rs 25,000 crores till June 2022.
According to a letter from All India Gaming Federation (AIGF), E-Gaming Federation (EGF) and the Federation of India Fantasy Sports (FIFS) to the Home Minister, “shutting down regulated Indian platforms would push crores of users into the hands of illegal matka networks, offshore gambling websites, and unregulated operators.”