The Indian online gaming industry entered a period of upheaval after the government enacted the Promotion and Regulation of Online Gaming Act, 2025. This law banned real-money gaming (RMG), a vertical that fueled rapid growth for many platforms. As soon as the law came into effect, the industry faced widespread job losses, shutdowns, and abrupt restructuring. One of the largest firms in the sector, Gameskraft, moved quickly to downsize. The company announced that it laid off 120 employees across departments. The move highlights how legal changes can reshape business models overnight and force companies to take difficult decisions.
The Trigger: Ban on Real-Money Gaming
The new law defined real-money gaming as any game in which players wager cash with the expectation of monetary rewards. That definition covered rummy, poker, and other skill-based card games that dominated Gameskraft’s portfolio. The government argued that these games created addiction risks, money-laundering avenues, and regulatory loopholes. Lawmakers decided to shut down the industry instead of adding lighter guardrails.
Gameskraft depended heavily on apps such as RummyCulture and Pocket52, both of which operated on real-money stakes. The ban forced the company to halt these products. With its core revenue streams blocked, Gameskraft needed to restructure its cost base. The layoffs became inevitable once leadership accepted that no legal workaround existed in the short term.
The Layoffs and Immediate Impact
Gameskraft cut 120 roles across technology, marketing, finance, operations, and support. The company stated that performance played no role in the decision. The layoffs came as a direct result of the legal environment. Employees lost their jobs not because of skills or output, but because the market for their work disappeared overnight.
The company rolled out a severance package. It offered notice pay, leave encashment, and additional financial assistance in line with employment contracts. Gameskraft extended health insurance coverage until March 2026, or until the affected staff joined new employers. The company also created a conversion option that allows employees to shift from group insurance to individual policies.
While employees welcomed these measures, many described the emotional toll as severe. The layoffs affected both junior and senior roles, and some teams lost more than half their members. Several employees shared that they built their careers around gaming, and now they must restart in a different industry.
A Parallel Crisis: Fraud Allegations Against Former CFO
The layoffs coincided with another storm inside Gameskraft. The company filed a police complaint against its former CFO, Ramesh Prabhu, accusing him of diverting company funds into unauthorized trades. According to reports, Prabhu allegedly moved ₹250–270 crore into futures and options (F&O) positions without board approval.
Gameskraft discovered irregularities during routine internal audits. The leadership team then investigated further and filed a First Information Report (FIR) in Bengaluru. The fraud allegations shocked the industry because Gameskraft already faced regulatory heat. The news of financial misconduct added doubts about its internal controls and governance framework.
Investors, analysts, and regulators now question whether the company can recover quickly. Some insiders believe the fraud case worsened the leadership’s decision to cut jobs, as management wanted to stabilize finances and rebuild trust.
Industry-Wide Fallout
Gameskraft did not suffer in isolation. The online gaming ban created a sector-wide crisis. Reports suggest that more than 2,000 employees across gaming firms lost jobs in the weeks following the law. Companies such as MPL, Junglee Games, and smaller startups also began restructuring.
Several platforms explored pivots toward casual games, fantasy sports with virtual coins, and e-sports tournaments without cash rewards. But such pivots demand new product strategies, new user acquisition, and different monetization models. Many firms lack the financial runway to manage such a sharp transition.
Recruitment firms reported a sudden surge of resumes from gaming professionals. Many of these workers now seek roles in fintech, e-commerce, or technology services. The job market, however, cannot absorb such a volume immediately, creating career uncertainty for thousands.
Regulatory Context
The Indian government previously allowed real-money gaming under state-wise guidelines. Courts often ruled that rummy and poker qualified as “games of skill” and not gambling. This legal interpretation created a grey area that companies exploited for years.
However, the government changed its stance after rising concerns about addiction, financial distress among players, and increasing tax disputes. The GST Council had already slapped 28% GST on RMG platforms in 2023, which hurt profitability. The new law in 2025 closed the door entirely by banning cash-based games.
Industry lobby groups criticized the move. They argued that the ban eliminates a thriving ecosystem, drives jobs out, and pushes players toward offshore or illegal platforms. But policymakers framed the decision as a moral and social safeguard, claiming that regulation alone could not mitigate risks.
Gameskraft’s Strategic Options
With its main business shuttered, Gameskraft must reinvent itself. The company can explore several paths:
- Casual Gaming Expansion – Gameskraft can build ad-driven, free-to-play games that attract mass users. India’s internet penetration provides scale, though monetization remains weak compared to RMG.
- E-sports and Streaming – E-sports tournaments, sponsorships, and live streaming can create new revenue streams. However, the competition from global players like Garena and Riot Games remains intense.
- International Markets – Gameskraft can expand into regions where RMG remains legal. This option demands heavy compliance work and capital investment, but it offers continuity for its existing expertise.
- Diversification Beyond Gaming – The company may also pivot toward fintech, entertainment, or technology services. Some of its engineering and data science talent can find applications outside gaming.
At present, Gameskraft leadership has not announced a detailed pivot plan. Insiders say management wants to stabilize operations, handle legal issues, and then evaluate new directions.
The Human Side of Restructuring
Behind the headlines and numbers, human stories stand out. Employees described the sudden shock of receiving layoff notices. Many had worked at Gameskraft for years, contributing to its rise as a major player in India’s gaming industry. The sudden shift left them scrambling for alternatives.
Employee support groups have emerged on platforms such as LinkedIn. Recruiters from fintech, SaaS, and tech startups began reaching out to laid-off workers. Several gaming professionals also plan to launch independent studios, focusing on small-scale casual games. While the industry shrinks in one area, entrepreneurial sparks remain alive in another.
Broader Implications for India’s Startup Ecosystem
The Gameskraft layoffs raise questions about regulatory risk in India’s startup ecosystem. Investors often price in execution risk, competition risk, and market risk. But sudden legal shifts represent a risk that startups cannot easily hedge.
The online gaming ban shows how governments can redefine entire industries overnight. Startups that rely heavily on legal loopholes face existential threats. This dynamic may push investors to prefer safer, regulation-light sectors such as SaaS, enterprise software, or export-driven businesses.
At the same time, the incident underlines the importance of corporate governance. Allegations of financial misconduct by a top executive create doubts about oversight practices. Investors may now demand stronger checks, independent audits, and stricter financial controls before deploying capital.
What Lies Ahead
For Gameskraft, the immediate task involves supporting affected employees, cooperating with authorities on the CFO case, and communicating clearly with investors. In the medium term, the company must decide whether it wants to remain in gaming or diversify.
For the industry, consolidation appears inevitable. Smaller firms may shut down completely, while larger ones may survive by pivoting to legal segments. The government faces the challenge of enforcing the ban without pushing players into unregulated spaces.
In the end, the layoffs at Gameskraft symbolize a broader transition. India’s online gaming industry rose rapidly on the back of real-money products. That era has ended abruptly. The companies that survive will be the ones that adapt fastest, innovate new models, and rebuild trust with regulators and users alike.
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