Nazara extends losses, bleeds 16%; what's spooking the online gaming stock?

Nazara Technologies extended its morning losses on stock exchanges and fell 16 per cent to hit a low of Rs 1,177.45 on  BSE, even as the online gaming company said it does not anticipate any material adverse impact on its operating financial performance due to the proposed ban on real money gaming or RMG. 

The Promotion and Regulation of Online Gaming Bill, 2025 was tabled in Parliament today. This bill sought to ban “online money gaming”, which is the “depositing of money” for “winning money or other stakes”. This would impact online games such as rummy, poker, etc, where winning money is possible.

"Under Indian law games of skill are legal, and games of chance are considered gambling and prohibited. Wagering money on games of skill was legal until now. The bill in Parliament follows a regulatory trend against RMG even in games of skill – the Madras High Court in June 2025 had upheld restrictions on Real Money Games in Tamil Nadu," said Vikram Jeet Singh, Partner at BTG Advaya. 

Singh said pursuant to these new regulations, even games of skill that involve real money can be banned. Advertising RMG will be prohibited and promoting this may lead to sanction for advertisers as well, he noted.

"One reason that has been suggested for this ban is the alleged use of RMG for money laundering activities. India’s online gaming market is valued at almost $4 billion, which will take a hit following from this - banning RMG may also have an impact on people employed in the gaming sector. Gaming companies have been subject to a 28 per cent GST levy, in the past. But the bill indicates a move from regulating to banning, when it comes to RMG," Singh said.

Historically, the Indian judiciary has drawn a clear distinction between games of skill and games of chance, with the former enjoying constitutional protections. In landmark rulings of the Supreme Court, as well as various high courts, it has been consistently held over a long period of time, that games like rummy and horse racing, which involve substantial skill, do not constitute gambling—even when played for money, said Vaibhav Kakkar, Senior Partner at Saraf and Partners.

"The proposed bill’s sweeping ban on online money games risks undermining this well-established legal precedent. The bill’s sustainability against constitutional principles certainly warrants a more comprehensive review and debate A nuanced approach that distinguishes games of skill from games of chance, while ensuring consumer protection and responsible gaming, is essential. Blanket prohibitions may not only be legally untenable but also economically counterproductive," Kakkar said.

Earlier today, Nazara said the contribution to revenues and Ebitda by RMG business was NIL at the end of June quarter. Nazara Tech said its only indirect exposure to RMG is through its 46.07 per cent stake in Moonshine
Technologies Private Limited (PokerBaazi). 

"As Nazara does not hold a majority stake or exercise control, Moonshine’s revenue is not consolidated in the Company’s financial statements and has no impact on the Company’s reported Revenue or Ebitda. The contribution to PAT by Moonshine as share of profit & loss by associate is negative in Q1-26," it said.

Nazara said the company had invested Rs 805 crores towards equity shares in Moonshine through a
combination of cash and stock and, in addition, held compulsory convertible shares amounting to
Rs 255 crore.

"Accordingly, the company does not anticipate any material adverse impact on its operating financial performance," it said.