Paytm’s unit, First Games, has officially shut down its real-money gaming (RMG) business in compliance with India’s newly enacted Promotion and Regulation of Online Gaming Act, 2025. From now on, the platform will operate only social, non-monetary games that fall within legal boundaries.
Strategic Restructuring and Financial Implications
Internal Reallocation & Investments
At its August 25 board meeting, Paytm approved strategic moves including:
- Up to ₹300 crore investment in Paytm Money Limited and ₹155 crore in Paytm Services Pvt. Ltd.
- Transfer of First Games Technology shares from Paytm Cloud Technologies to Paytm Services for up to ₹140 crore
Minimal Exposure, Simplified Licenses
First Games is treated as a joint venture, and its performance has negligible impact on Paytm’s consolidated revenues. The company’s only exposure is a shareholder loan of around ₹200 crore (with interest) as of June 30, 2025.
Behind the Decision: Regulatory Forces & Strategy Alignment
Regulatory Compliance
With the government’s new Online Gaming Act, Paytm is forced to exit any real-money gaming operations, aligning First Games with permitted regulations.
Tax Dispute at Play
First Games received a massive ₹5,712 crore GST notice from authorities—later stayed by the Supreme Court in May 2025. While still pending, this legal entanglement added urgency to the decision.
At-a-Glance Summary
| Category | Details |
|---|---|
| Unit | First Games (Paytm’s gaming platform) |
| Change | Real-money gaming operations discontinued |
| Rationale | Compliance with Gaming Act 2025 and pending GST litigation |
| Financial Exposure | ₹200 crore shareholder loan; zero book value on investment |
| Investment Redirection | ₹300 crore to Paytm Money; ₹155 crore to Paytm Services; share restructuring |
What This Means for Paytm & Users
- Regulatory Alignment: Paytm proactively adapts to India’s changing legal framework for online gaming.
- Business Focus Shift: Resources are being redirected toward core fintech services like Paytm Money and Paytm Services.
- Risk Management: With First Games no longer contributing to revenues and carrying minimal exposure, the company simplifies its risk profile.
