GamesKraft’s FY24 Profit Slips 11% To INR 947 Cr

GamesKraft’s FY24 Profit Slips 11% To INR 947 Cr

SUMMARY

Gameskraft’s revenue from operations grew 30% year-on-year to INR 3,474.9 Cr in FY24 from INR 2,672.7 Cr in FY23

Gameskraft’s total expenses saw a sharp 72% year-on-year increase to INR 2,232.5 Cr in FY24 from INR 1,300.7 Cr in FY23

The startup’s advertising expenses saw a sharp rise of 113% to INR 1,314.82 Cr in FY23

Real money gaming startup GamesKraft’s net profit declined 10.8% to INR 946.9 Cr in the financial year 2023-24 (FY24) from INR 1,061.9 Cr in FY23 amid changes in taxation, GST notices, and legal issues.

Revenue from operations grew 30% to INR 3,474.9 Cr in FY24 from INR 2,672.7 Cr in FY23, as per the company’s filings with the Registrar of Companies.

The gaming startup’s total revenue, including other income, increased 28% to INR 3,521.4 Cr during the year under review from INR 2,732.11 Cr in FY23.

Founded in 2017 by Prithvi Raj Singh, Deepak Singh, Rajkumar Taneja, and Sindhu Devi Jha, GamesKraft operates real money gaming platforms such as RummyCulture, RummyPrime, Playship, Pocket52 and LudoCulture.

It earns most of its revenue by taking a commission or platform fee from the amount users pay to join a game or tournament. This fee is typically a percentage of the entry fee or buy-in amount. The revenue is recognised once the game or tournament is completed.

Where Did GamesKraft Spend?

GamesKraft’s total expenses saw a sharp 72% increase to INR 2,232.5 Cr in FY24 from INR 1,300.7 Cr in FY23.

Advertising Promotional Expenses: The startup’s advertising expenses saw a sharp rise of 113% to INR 1,314.82 Cr in FY24 from INR 616.62 Cr in FY23, accounting for the biggest portion of the total expenditure.

Employee Cost: The startup saw an increase of 23% to INR 462.95 Cr in FY24 from INR 374.9 Cr in FY23.

It must be noted that FY24 was the first financial year after the new GST policy came into effect for online gaming. On October 1, 2023, the finance ministry notified provisions to impose a 28% GST on online gaming.

Under the new regulations, a flat 28% tax applies to the total value of bets for online games, irrespective of whether they are games of skill or chance. Previously, a lower 18% GST was levied, specifically on the platform fee for skill-based games.

Several gaming companies, including GamesKraft, Dream11, Games24x7, and Head Digital Works, faced GST notices demanding taxes on the full value of bets placed on their platforms.

However, the Supreme Court recently issued a temporary stay on GST proceedings against 49 real-money gaming companies. This stay halts retrospective tax demands, providing temporary relief to these platforms.

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