Introduction: A Paradox in India’s Gaming Story

On 8 December 2025, Korean publisher Krafton – the company behind PUBG and Battlegrounds Mobile India (BGMI) – confirmed plans to invest around ₹1,800 crore in India over the next 3–4 years. This announcement lands just months after India passed the Promotion and Regulation of Online Gaming Act, 2025, a federal law that bans all real-money online games and has already wiped significant value from listed gaming stocks and related businesses.

Investors in global gaming equities now face a complex picture: regulatory risk crushing parts of the Indian real-money gaming ecosystem, while a major global publisher simultaneously doubles down on India as a long-term strategic market.

India’s Real-Money Gaming Ban: What the Law Actually Does

The Promotion and Regulation of Online Gaming Act, 2025:

Imposes a blanket ban on “online money games” – games where users stake real money, including both games of chance and games of skill.
Prohibits advertising, promotion and financial transactions related to such platforms, effectively cutting off banking and payment rails.
Provides for jail terms and monetary fines for companies and individuals offering these services.
Explicitly distinguishes between real-money gaming (banned) and esports / non-monetary online gaming, which the government frames as acceptable and even desirable policy targets.

The law followed several years of state-level experimentation and court cases, but its national scope is dramatically larger in scale. It has caused an immediate and ongoing re-pricing of regulatory risk in India-exposed gaming equities.

Stock Market Impact: Nazara, Delta Corp and the “RMG Discount”

The equity market reaction was swift and brutal:

On and around the bill’s passage in August 2025, Nazara Technologies and Delta Corp sold off sharply, with Nazara dropping more than 20% over a few sessions as investors questioned the value of its exposure to real-money poker via Moonshine (PokerBaazi).
Delta Corp – heavily geared to casinos and online real-money gaming – has faced both share-price pressure and balance sheet damage. By October, the company disclosed write-offs of roughly ₹460 crore linked to the new legislation’s impact on its online gaming investments.
A separate but related hit came from the GST Council’s decision to levy 40% GST on casinos, betting and online money gaming, further compressing earnings expectations for listed players with any RMG exposure.

For investors, the market’s message is loud and clear: real-money gaming businesses operating in India now carry a structural “regulatory overhang” that is being priced into earnings multiples, cash-flow forecasts and impairment assumptions.

Beyond Listed Equities: Venture-Backed Fantasy and RMG Startups

While many high-profile platforms like Dream11, Games24x7 and Mobile Premier League are unlisted, the law’s impact on them still matters for public-market investors:

The fantasy and RMG ecosystem had been projected to reach several billion dollars in value by the end of the decade, attracting substantial foreign VC and PE capital.
The blanket ban has frozen key growth narratives: TAM expansion, ARPU uplift, and cross-sell from fantasy into other monetised formats.
The risk that capital exits or reprices the entire Indian RMG segment downward has second-order implications for payments companies, ad-tech platforms, sports IP owners and broadcasters that were indirectly benefiting from this spend.

Even though these are largely private assets, their distress can ripple into public markets through impairments at listed investors, reduced marketing budgets for sports and gaming IP, and weaker ad revenue for platforms.

Krafton’s ₹1,800 Crore India Plan: A Different Kind of Bet

Against this backdrop, Krafton’s fresh commitment to invest around ₹1,800 crore in India over 3–4 years looks contrarian at first glance. The Times of India reports that the company intends to channel this capital into:

Expanding BGMI’s ecosystem and esports presence.
Supporting local game development and publishing partnerships.
Broader digital gaming and content initiatives, not confined to real-money gaming.

This builds on Krafton’s earlier strategic posture:

The company achieved record-high H1 2025 revenue, driven largely by the PUBG IP and new content initiatives, giving it a strong balance sheet and cash-generation base to fund international bets.
Management has repeatedly flagged India as a core growth market, with prior guidance that it would invest at least tens of millions of dollars annually in the country across publishing, esports and ecosystem support.

In other words, Krafton’s capital allocation is targeted at segments that remain legal and encouraged under the new framework: esports, streaming, creator-led ecosystems and non-monetary online play.

How Equity Investors Should Read Krafton’s Move

For public-market investors in gaming, Krafton’s India plan sends several signals:

Shift from RMG to content- and IP-led exposure: The attractive long-term driver is not real-money wagering, but rather the scale of India’s young, mobile-first gamer base. Publishers that monetise via traditional in-game purchases, cosmetics and live-ops can still grow.
Regulatory diversification within India: While RMG has hit a wall, the government has explicitly carved out room for esports and social gaming. Krafton is positioning itself on the “right side” of that policy divide.
Signalling confidence to the market: Despite Krafton’s share price trading closer to the lower end of its 52-week range after a volatile year, the company is deploying capital into India as a multi-year growth lever rather than retreating.

For portfolio construction, this suggests that pure-play Indian RMG exposures and global content/IP publishers with diversified geographies and monetisation models should be treated very differently in terms of risk premia and scenario analysis.

Key Risks and Unresolved Questions

Despite Krafton’s bullish stance, several material risks remain:

Implementation and legal challenges: Individual states, such as Karnataka, are already testing the boundaries by seeking to legalise specific forms of wagering (e.g., online horse-racing), setting up a likely confrontation with the central law. Court outcomes could reshape the landscape again.
Policy drift: A change in political priorities, economic conditions or public-health narratives could lead to either a softer stance (e.g., regulated RMG with taxation) or an even stricter posture toward gaming more broadly.
Execution risk for Krafton: Converting headline investment commitments into profitable local partnerships, successful new IP and sustainable esports ecosystems is non-trivial. Mis-allocation or slow payback could invite future shareholder scrutiny.
Macro and FX headwinds: For global investors, INR volatility and broader emerging-market risk can erode returns even if local-currency revenue grows.

Strategic Takeaways for Gaming and Entertainment Investors

Putting the pieces together:

The Indian real-money gaming crackdown is a structural event, not a temporary regulatory blip. Business models centred on stakes, rakes and wagering in India now deserve a discount and higher required returns.
At the same time, India’s non-RMG gaming opportunity remains compelling: hundreds of millions of potential players, rising smartphone penetration and a cultural tilt toward esports and social games.
Global publishers like Krafton, which monetise through content rather than betting mechanics, are attempting to capture this upside while keeping clear regulatory distance from banned segments.
For diversified gaming portfolios, this argues for tilting exposure toward IP-rich publishers with solid governance and cash generation, and treating India-linked RMG as special-situation, high-risk capital rather than core holdings.

The paradox of 2025 is that India is simultaneously one of the hardest environments on earth for real-money gaming and one of the most attractive long-term markets for mainstream PC, console and mobile game publishers that can stay within the evolving regulatory guardrails.

Krafton’s ₹1,800 Crore India Bet vs. New Real-Money Gaming Ban: What It Signals for Gaming Investors