Mobile Premier League (MPL), a prominent gaming unicorn, has taken the step of reducing its workforce by 350 employees in response to the GST Council’s decision to impose a 28% Goods and Services Tax (GST) on real-money gaming. This decision marks the first significant repercussion of the new tax rate on the gaming industry.
MPL CEO Sai Srinivas Explains the Decision
In an internal communication to employees, MPL’s CEO and Co-founder, Sai Srinivas, attributed the layoffs to the substantial increase in the company’s tax burden due to the new 28% GST on full face value for real-money gaming. Srinivas clarified that this tax hike had elevated the tax burden by a staggering 350-400%.
Uncertainty Prompts Tough Choices
Srinivas acknowledged the current uncertain circumstances and emphasized that the company had thoroughly evaluated the necessity of layoffs. He expressed that the decision was motivated by the need to provide certainty to all stakeholders promptly.
Industry Backlash and Ongoing Impact
The GST Council’s decision to impose a 28% GST on entry-level payments for online gaming had triggered widespread backlash from various segments of the gaming ecosystem. Numerous stakeholders denounced the new taxation regime as “unconstitutional” and “irrational.” Investors also advocated for the reversal of the 28% GST due to its adverse impact on the local gaming industry.
MPL Journey and Challenges
Founded in 2018, MPL has become a gaming sector unicorn. It provides fantasy sports, sports games, puzzles, casual, and board games. Unicorn status was attained in 2021 through a $150 million Series E funding. Despite achievements, MPL faces challenges like legal disputes with state governments over online gaming’s legality and unclear regulations. Recent months showed exceptional business performance. However, a new tax rate imposition led to tough choices, including employee layoffs due to increased tax burden.
Despite these challenges, MPL remains a key player in the gaming industry, competing with rivals such as Dream11, WinZo Games, and Junglee Games. The startup’s journey continues as it navigates a complex landscape marked by regulatory changes, market dynamics, and ongoing efforts to innovate and deliver engaging gaming experiences.
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