Fantasy gaming platform Dream11 FY23's revenue climbs 66% to Rs 6,384Cr

Dream11, a leading fantasy sports platform, has reported a significant financial upswing in FY23. The company's operating revenue soared by 66% to Rs 6,384 crore, while its net profit increased by 32% to Rs 188 crore. 

The growth comes despite the company grappling with a substantial tax demand from the GST authorities.

Tax challenges and future concerns

The company is currently facing a tax demand exceeding Rs 28,000 crore. Dream11's auditor, EY affiliate SR Batliboi & Co, has raised concerns in the financial statements, suggesting that these demands could cast doubt on the company's ability to continue as a going concern. 

Expenditure and investment in advertising

A significant portion of Dream11's expenses, amounting to Rs 2,964 crore (a 37% increase from the previous year), was allocated to advertising and promotions. The strategy included heavy investment during major sporting events like the Indian Premier League and the T20 World Cup. Additionally, the company's staff costs more than doubled, reaching Rs 1,154 crore.

Impact of new GST regime

The introduction of a new GST regime for online real money games has impacted Dream11's financial planning. The company has had to adjust to a 28% levy on the full face value of bets, a steep increase from the previous 18% tax on platform fees. The change has led Dream11 to cut its profit target for FY24 by 80%.

Comparative industry performance

While Dream11 leads in revenue generation among fantasy sports platforms in India, other companies like Gameskraft and Mobile Premier League (MPL) also reported significant financial performances. Gameskraft's revenue stood at Rs 2,662 crore with a net profit of Rs 1,062 crore, while MPL narrowed its losses considerably. The industry, however, faces challenges with the new tax regime, leading to layoffs and shutdowns in some companies.

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