Hike Shuts Down: India's Real-Money Gaming Crackdown

Hike Shuts Down Following India’s Real-Money Gaming Ban

Hike, formerly a highly-valued Indian startup achieving unicorn status, has ceased operations due to the recent prohibition of real-money gaming in New Delhi. The company, spearheaded by Kavin Bharti Mittal – son of Airtel’s founder, Sunil Bharti Mittal – is now undergoing complete closure.

U.S. Business and Future Prospects

Mittal announced on Saturday that the company’s U.S.-based venture, launched nine months prior, demonstrated a promising initial trajectory. However, he determined that expanding this business globally would necessitate a substantial restructuring and reallocation of resources, which he deemed an inefficient use of both capital and time.

From Messaging App to Gaming Platform

Originally debuting in 2012 as an instant messaging application intended to compete with WhatsApp, Hike transitioned its focus to real-money gaming in subsequent years. Its primary platform, Rush, provided opportunities to win cash prizes through casual games such as carrom and ludo, following the discontinuation of Hike Messenger in 2021.

Over its four-year lifespan, Rush successfully attracted over 10 million users and generated gross revenues exceeding $500 million, as stated by Mittal.

Early Investment and Valuation

Hike’s initial ambition to challenge WhatsApp with a messaging app geared towards younger demographics garnered support from prominent investors. These included Tiger Global, SoftBank, and Tencent. The startup reached a valuation of $1.4 billion in 2016.

The Decision to Cease Operations

“While securing funding is possible, the crucial question remains: is the effort justified? Is this a worthwhile endeavor to pivot towards?” Mittal articulated in a Substack publication. “For the first time in 13 years, my response is negative – not for myself, not for my team, and certainly not for our investors.”

New Regulations and Industry Impact

Last month, the Indian government unexpectedly impacted the $23-billion real-money gaming sector by enacting the Promotion and Regulation of Online Gaming Act, 2025. This legislation imposed a comprehensive ban on such platforms.

The government justified this decision as a response to reported incidents of harm, including tragic cases of suicide linked to financial losses incurred through these games.

Industry Response to the Ban

Leading companies within the industry, such as Dream Sports and Mobile Premier League (MPL), have begun to dismantle their real-money gaming operations in India. Some are exploring alternative ventures like micro-dramas and financial services, while others are investigating opportunities in international markets to sustain portions of their gaming businesses.

Layoffs and Investor Concerns

The regulatory crackdown has instigated widespread layoffs, with approximately 2,000 jobs lost across companies including Games24x7, Head Digital Works, MPL, and Zupee. Reports indicate that some companies are contemplating workforce reductions of up to 90% as they navigate adaptation or exit strategies, according to sources who spoke with TechCrunch.

Several venture capital firms investing in these startups have reportedly questioned their founders regarding any prior indications of impending regulatory action and the rationale behind the lack of preventative measures, as revealed by sources familiar with these discussions.

Legal Challenges and Supreme Court Involvement

Earlier this week, the Indian Supreme Court consolidated all legal challenges to the new law – the specific rules of which are still pending notification – transferring them from various state courts nationwide. However, the Supreme Court has not yet scheduled a hearing on the matter.

Looking Ahead

“This outcome is undoubtedly disappointing and challenging. Nevertheless, I am choosing to focus on the positive aspects: the lessons learned are invaluable, and my confidence in future endeavors is stronger than ever,” Mittal concluded.