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The domestic gaming industry was hit by a flurry of finance-related issues recently. The online rummy site RummyCircle’s parent company, Play Games24x7 Pvt. Ltd., was served an insolvency petition by digital and affiliate marketing company Living Consumer Products Pvt. Ltd for alleged non-payment of pending dues. The matter was heard by the NCLT Bench on August 5 and will be brought up again on September 11.
Kolkata-based Ability Games was also in the news for purchasing an undisclosed stake in Ahmedabad-based IT company Yudiz Solutions Pvt. Ltd., which CEO of Ability Games, Navneet Makharia stated was a strategic move on the company’s part.
Online poker giant PokerStars meanwhile, registered a 12% decline in poker revenue for the third consecutive quarter. The Stars Group that operates PokerStars reported $191.5 million in poker revenue in Q3, falling short of $200 million for the first time in three years.
The online rummy site, RummyCircle’s parent company Play Games24x7 Pvt. Ltd. got slammed with an insolvency petition by digital and affiliate marketing company Living Consumer Products Pvt. Ltd for alleged non-payment of pending dues.
According to a report published on Glaws, “Living Consumer Products, as an operational creditor, has filed the petition in the Mumbai bench of the National Company Law Tribunal initiating corporate insolvency process against Play Games24x7 for non-payment of dues for goods/services under Section 9 of the Insolvency and Bankruptcy Code, 2016.”
The matter was heard before the NCLT Bench on August 5 wherein Play Games24x7 was asked to file its response to Living Consumer’s accusation by August 6, post which Living Consumer Products can file a rejoinder.
The matter has been listed for further hearing on September 11, once all the replies get filed.
Director of Living Consumer Products, Amit Vora and CEO and co-founder of Play Games24x7, Bhavin Pandya both declined to comment on the matter directly. While Vora said, “As the matter is subjudice, I reserve my comments on this topic,” Pandya issued an emailed statement, “The affiliate marketing industry in India is rapidly evolving. With the increasing migration of services to the online medium, it is imperative that the online affiliate marketing industry also follows high standards and responsible business practices. One of the challenges faced by advertisers is affiliate fraud at all scales by some small or big online marketing affiliates.
This is not a new problem however in the more mature affiliate marketing industry in the West, both parties, the advertisers and the affiliates have understood the value of working with their interests aligned and therefore are naturally moving towards revenue sharing arrangements. This industry being new in India, these models are yet to evolve on the backdrop or more transparency and willingness to share data between stakeholders.
At RummyCircle and My11Circle, we are constantly improving our systems by running real time data science models to detect affiliate marketing fraud. The company has also faced issues of misreported acquisition data and is able to now substantiate, with its own data, and take quick corrective action to mitigate losses and clean up the practices at the end of the affiliates. It is not surprising that some operators who look at short term gains, resist the idea of transparency for short term business objectives, however, this is not good for the health of the online marketing industry and eventually will destroy creativity and competition.
Given where the industry is right now, accountability of reporting relevant user information to detect fraud is a challenge due to lack of proper information sharing by the affiliates. The company however is committed to use technology and data science to improve this industry and hopes that these steps help every stakeholder in the long run. The company cannot comment on the specifics of a dispute with any vendor that is pending adjudication and it is appropriate to await the outcome of the adjudication process.”
Kolkata-based Ability Games that runs online poker site PokerLion and fantasy sports site 11Wickets, recently announced that it had acquired an undisclosed stake in Ahmedabad-based IT company Yudiz Solutions Pvt. Ltd.
The acquisition of Yudiz Solutions by Ability Games, which also operates sports news portal Sports.info, comes as no surprise. Yudiz Solutions specializes in providing services such as game development (including Virtual Reality Games), mobile and app development, web designing and branding, and boasts of premiere clientele that includes renowned brands like Nestle, Network18 and Groupon.
Talking about the acquisition, CEO of Ability Games, Navneet Makharia said, “This is a strategic acquisition on part of Ability Games, keeping in view the future growth prospect of the company. We will now be covering various line of products in real money gaming, play money gaming and various sports information. Now all our products will be developed in-house and we will work on 100% proprietary software.”
It was at least the third consecutive quarter of year-over-year decline for the biggest poker site on the planet, PokerStars whose revenue dropped by 12%.
For the first time in the past three years, the company failed to generate $200 Million in revenue as the total revenue reported this quarter amounted to $191.5 million. The Stars Group’s (TSG) share value also took an almost 20% hit and fell from $16 (last week) to around $13 after the quarter’s numbers were released last Monday.
In Q3 of 2018, PokerStars had reported poker revenue of $212.8 Million (a year-over-year decline of 3.9%) while in Q4 of 2018, the revenues fell to $210.9 million (a year-over-year decrease of 10%).
The company’s total revenue figures for the year are expected to stay within the $800 Million zone while the same had touched $900 Million these last two years.
TSG undoubtedly became a significant player in the growing sports betting market after the acquisition of online sports betting company Sky Betting & Gaming last year. At the same time, however, it seems that poker took a backseat for the company and testament to that is the fact that for the very first time, sports betting and casino revenue has surpassed revenue from poker operations at TSG. Poker accounted for 30.4% of the company’s revenue as compared to 30.8% by casino operations and 35.7% by sports betting.