The Great Reset: Will RMG's Fallen Founders Rise Again?

The month of August has been nothing short of dreadful for the entire real-money gaming (RMG) sector, which collapsed in a matter of days (between August 18 and August 22).

A sector that had nurtured some of the country’s most ambitious tech entrepreneurs was gutted with the introduction of the Promotion and Regulation of Online Gaming Bill, 2025. With this, the government finally concluded a long debate over games of skill or chance.

The fallout was prompt — all major RMG platforms suspended their pay-to-play services.

While there has been little to no impact on the withdrawal of funds on the users’ end, for founders, it is a lesson that regulatory burdens, ambiguities in laws and cultural taboos are enough to strangle an entire industry to its demise.

“It feels like we’re back to day zero, starting all over again,” the founder of a prominent RMG startup said. He added that when he entered the sector, he was totally aware of the risks. Still, he said, there was confidence that the government would try to work its way around and not raze an entire industry to the ground.

“Our balance sheets bear witness to the trust we had in the government,” the founder said, hinting at the lofty gains many in this line of business made over the years.

Of course, founders are mourning, but compliance is not up for debate, and most of them are not contemplating a legal battle. Instead, there is a shift towards survival, pivot, and new possibilities.

Making Peace With The Inevitable

When the bill was announced, it became impossible for founders to pretend otherwise — they knew the end was near, and the government did not flinch once before enforcing it.

“But at what cost?” a founder asked, adding that the industry peers had always been compliant even when RMG was still a blooming picturesque.

“While accepting the new reality has not been easy, the first thing many founders did after suspending their respective RMG services was to ensure that every pretty penny of their users was safe. We knew that was the minimum we owed our customers,” the founder said.

Meanwhile, many in the ecosystem, who were rather prepared for a 40% GST regime, never imagined that a complete ban would arrive instead.

Some were exploring pivots, others restructuring operations, but none envisioned a complete shutdown.

The only silver lining in these troubled times is that the founders now have clarity. No longer will they have to spend time fighting their battles in Indian courts and NCLTs.

They seem to have made peace with the government’s decision. “Fighting feels pointless — a waste of time and money, which is no longer a luxury for them,” as some RMG founders put it.

Despite everything, Dilsher Singh Malhi, founder and CEO of Zupee, said that the Indian RMG founders respect the legislative process and remain committed to operating and innovating within the framework of the law, while collaborating with policymakers to shape India’s entertainment ecosystem.

A Desperate Yet Defining Pivot For Survival

Amid the current scheme of things, the focus has now shifted from growth to survival, all while protecting employees and planning for what is to come next.

Many founders may feel like starting from scratch, but perhaps that’s not the worst thing to do. “Starting from scratch is something we know well. It is hard and humbling, but the spirit that built RMG in India isn’t going anywhere,” a founder said.

What stood out while speaking with RMG founders was the urgency to pivot. This very realisation has initiated restructuring in teams, business models, and priorities.

The immediate concern is people. With revenues cut off overnight, organisations are reassessing headcounts while trying to hold on to the core talent.

While many are considering pivots in sync with their strengths (game design, user interaction, payments, and community creation), others are shifting towards casual gaming, where monetisation relies on in-app purchases, ads, and brand sponsorships instead of bets.

Similarly, some founders are exploring broader entertainment plays such as interactive content, fantasy-lite formats, and social platforms.

Monetisation models are also being reimagined. Subscription-based models, which were never quite adopted in RMG, are once again up for debate.

Advertising, previously written off as too niche to support serious gaming businesses, is being reconsidered. Some are even exploring hybrid models that merge commerce, gaming, and creator economies into new categories.

The Great Reset?

RMG founders are starting to see what has happened to the industry as a great reset and an opportunity to break free from the stifling regulatory noose.

RMG, while lucrative, was highly regulated and difficult to scale as it had money at stake. Now, founders are exploring how they can reposition the RMG startups as broader entertainment providers, technology enablers, or even platforms that foster community-driven engagement far beyond gaming.

A sizzling example is that of RMG startup WinZO, which has now entered the US market and additionally announced the launch of its microdrama segment.

“Entering the US, the world’s largest and most influential gaming market, is a decisive step towards that mission. We are equally excited to introduce ZO TV, our new short video format, which further diversifies our content offerings and strengthens WinZO’s position as a global hub and one-stop destination for interactive entertainment,” WinZo cofounder Saumya Singh Rathore said.

RMG founders are also open to venturing into other sectors — fintech infrastructure, gamified education, social commerce, and creator-first platforms.

While the collapse of India’s RMG sector may have closed one chapter, it has opened another. For founders, the task now is not just to survive, but to prove they can build enduring businesses, far from the jinx of social taboos, stifling laws and policy uncertainty.

[Edited by Shishir Parasher]

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