Games24x7's Bhavin Pandya hopes 2024 will be a promising year for industry

Bhavin Pandya hopes this year will offer clarity around regulations on which games are allowed and which aren't

Not many entrepreneurs openly acknowledge that luck is as crucial as hard work in achieving success. Bhavin Pandya, co-founder and co-CEO of gaming unicorn Games24x7, is among the exceptions.

“I’m a big believer in luck,” Pandya says. While many people talk about their hard work, he says, for every ounce of effort or persistence he has shown, he can find a hundred others who would surpass him. “There are a million people who are smarter and more intelligent than I am, but you are interviewing me,” he explains, scoring a point. 

We are meeting over breakfast at Westin Hotel’s Seasonal Tastes restaurant in Goregaon, Mumbai, trying to drown out the noise of a bustling morning rush. The restaurant on the 18th floor offers a glimpse of the evolving infrastructure in the western suburbs of Maximum City, but we haven’t chosen it for its view. 

The choice of venue is out of convenience, given that Pandya, who lives in Boston, Massachusetts, is staying at the hotel, which is across the street from the Games24x7 office. His job requires him to shuttle between Boston and Mumbai, the city where he grew up.

Luck. That’s not a word the gaming industry is comfortable using. It has, after all, been constantly striving to convince the authorities that it is in the business of skill, not chance. So how do investors perceive the luck factor in gaming, I ask him. “To them, we say the real-money game is a bumpy ride, but we believe in it. If they share that belief, they support us,” he says.

We head to the buffet. Pandya opts for tofu bhurji with tossed veggies, followed by a ragi uttapam with onion, tomato and cheese. He explains his protein-loaded choice, emphasising that as a vegetarian, he doesn’t get enough protein. I go with idli, sambar and a cup of cappuccino.

Founded in 2006 by Pandya and Trivikraman Thampy, Games24x7 achieved unicorn status in 2022. Although profitable in 2012, it had taken three years for the firm to go live, as it struggled to convince banks of its business model and getting a payment gateway. “We would be sitting at HDFC Bank every week…,” Pandya recalls.

The play of luck is evident in Pandya’s academic journey as well. Initially pursuing electrical and computer engineering, he later shifted gears, obtaining a master’s in economics from New York University (NYU), before enrolling for a PhD in economics in 2005. Thampy, an aerospace engineer from IIT Bombay with an MPhil in economics from the Indira Gandhi Institute of Development Research, joined NYU in 2001.

Pandya’s initial plan was to return to India after his PhD and work in the field of development economics. He was already working with some people in the microfinance space.

However, the allure of gaming took hold while he was in New York on a full fellowship, “which meant I didn’t have to worry about paying the bills, and sometimes, in such a scenario, the mind wanders…,” he says. He also confesses that he had little patience for the extensive research a PhD entails.

How did his parents feel about his drastic career shift? “My parents allowed me to do what I wanted, and more importantly, they did not have to rely on me, which meant I was able to explore — transitioning from engineering to economics to entrepreneurship”.

Returning to the subject of luck, Pandya emphasises its role in the gaming business, which is frequently challenged by regulatory and tax hurdles. He shares an example from 2021 when almost every state banned them. “Around 67 per cent of our business was wiped out. This happened as we clocked one of the best revenue growths ever,” he says.

Games 24x7 reported revenue of Rs 1,169.27 crore in 2021-22 (FY22), a 24.4 per cent drop from Rs 1,546.27 crore in FY21, leading to a loss of Rs 282 crore in FY22, compared to a profit of Rs 110 crore in FY21. The fall can be attributed to a decrease in users post-Covid. The company now has a player base of 130 million and a team of 800 employees. 

The gaming business is no child’s play. From convincing users to try an online platform to play and getting banks on board to convincing state governments that want to ban real-money games or tackling attempts to impose the goods and services tax (GST) retrospectively – it must be exhausting? Does that bother him? Even now real-money games remain banned in Tamil Nadu, Arunachal Pradesh, Telangana, Sikkim and Assam.

Pandya acknowledges the setbacks but also points to the gains. In 1968, for instance, the Supreme Court of India said that rummy was a game of skill and not a game of chance. So, under the law, it cannot be equated with gambling. Games24x7, incidentally, is a prominent player in the rummy segment, with its RummyCircle platform. It has also ventured into the fantasy sports platform with My11Circle. And recently, it launched a Rs 400 crore investment fund called Games24x7 Ventures for early-stage startups in the interactive entertainment space. 

“The first thing you must accept is that it is very hard to change perceptions,” Pandya says. “When you have cards, and money, and a game with a large prize, people are going to raise eyebrows,” he says. 
 

“Changing that perception continues to be the biggest challenge.”

But he’s optimistic that certain things that happened in 2023 will augur well for the industry. “First, we now have a nodal ministry (Ministry of Electronics and Information Technology, or MeitY) where we can go and raise our concerns,” he says. “More importantly the government has begun to recognise this industry through taxation.” MeitY also intends to look into creating a self-regulatory organisation for the industry.

Pandya hopes this year will offer clarity around regulations on which games are allowed and which aren’t. “This will create a closed loop where the money stays within the system and you don’t have national security issues like money laundering,” he says.

And GST? Like others in the industry, he too feels that 28 per cent is very high, but “I have no control over the GST,” he says. “I think the government has given us just enough, so while we’ve been pushed back a couple of years, it gives us a fighting chance – a legitimacy and room for growth.”

I ask if this has impacted users or the business. “We are bearing the tax on the users’ behalf,” he says.
 

Pandya, I notice, is now rushing through his breakfast and realise he has to leave in a few minutes to catch a flight to Delhi. So I pop one last question: given that every now and then the industry finds itself with its back to the wall, what keeps them motivated? 
 

“We want to create a platform for entertainment. We never started with the intention of becoming a billion-dollar company or a unicorn etc,” he says. Hence, the focus on playing responsibly, insisting on KYC, keeping underage gamers out and so on.

The industry, he feels, is at a point where the tug-of-war with the states will go in its favour. “That gives us a lot of hope,” he says. Add a bit of luck and 2024 could prove to be a promising year.