With online real money gaming industry facing strong headwinds due to uncertain regulations and policies, Zupee has steered towards its first-ever annual profit—proving that in the rush to scale, sustainability might just be the smartest bet. Shifting state-level bans, ongoing legal debates around what constitutes a “game of skill,” and lack of a central governing framework have created an unpredictable environment for operators and investors alike.
For the fiscal year ending March 31, 2024, Zupee posted ₹1,123 crore in net revenue and ₹146 crore in net profit, marking its first-ever year of profitability since its inception. In a sector where many companies are still in the red, chasing aggressive growth and user acquisition at the cost of profitability, Zupee’s performance serves as a beacon of sustainable success. In a business where speed often trumps strategy, Zupee is proving that in the rush to scale, sustainability might just be the smartest bet.
During FY24, Zupee also saw a 60% increase in its registered user base, a clear indication that its approach is resonating with the market. To fuel this growth, Zupee allocated ₹350 crore towards marketing and advertising, with a strong emphasis on digital platforms. However, the company also invested in traditional channels like TV and high-visibility events, including the Indian Premier League (IPL), blending both new-age and tried-and-true strategies. As a result, the company’s total expenses grew by 11.7% to ₹1,019 crore, up from ₹911.9 crore in FY23. A major chunk of this expenditure was directed toward marketing and user incentives, with ₹806 crore being spent in FY24 to drive the business forward.
In a fast-growing gaming ecosystem where many companies burn through massive amounts of cash in a relentless race to acquire users, Dilsher Malhi, Founder and CEO of Zupee, has chosen a different approach—one grounded in balance, profitability, and measured growth.
Malhi is quick to identify what truly powers sustainable growth. “There are four or five major channels through which you can acquire users,” he begins, breaking down the key drivers of Zupee’s user growth strategy with clarity that comes from lived experience.
First on Malhi’s list is word-of-mouth. “It’s the biggest and the most profitable channel,” he asserts. “Every user you acquire ends up recruiting even half a user. That kind of organic loop is gold for any company.” Zupee’s ability to create an organic growth loop among users has been instrumental in its scaling process, without needing to over-rely on expensive paid channels.
Alongside this organic growth driver is performance marketing, which directly communicates the functional benefits of the platform, and brand marketing, which focuses on embedding a larger, lasting message in consumers’ minds. Malhi notes that referrals, which incentivize the word-of-mouth loop, are a crucial part of the puzzle. By focusing on a multi-pronged strategy, Zupee avoids over-dependence on any single marketing channel, giving it an edge over competitors that might lean heavily on paid acquisition.
“Zupee has never been over-reliant on just one lever,” Malhi explains. “It’s directly tied to profitability. If your growth is overly dependent on paid channels, it’s going to be very hard to crack profitability.” This philosophy of balance has been central to Zupee’s success, allowing the company to scale while maintaining fiscal responsibility.
But it’s not just growth strategy where Malhi sees the need for thoughtful structure. He’s also vocal about regulatory clarity in the online gaming space—particularly with regard to skill-based games like Zupee’s flagship Ludo offering. Unlike other games such as Rummy and Poker, where there have been established legal rulings about whether they are games of skill or chance, Ludo still lacks clear legal definitions in the context of playing for stakes.
“There are millions of games. The courts can’t be the ones classifying each of them,” Malhi points out. “Even if you’re a rummy platform with a Supreme Court judgment backing you, you’re still struggling with retrospective tax issues.” Malhi’s concern isn’t limited to simply defining games of skill versus chance—it extends to a broader need for clearer guidelines that can govern the entire sector.
“Skill versus chance is only one part of the puzzle,” he explains. “We need advertising guidelines, responsible gaming standards, and frameworks under PMLA (Prevention of Money Laundering Act)—everything needs to come together. Only then can real value be unlocked in this sector.” In his view, the lack of a central authority or cohesive regulatory framework is creating an environment of uncertainty and debate that benefits no one.
“Clarity about Opinion trading won’t solve anything,” he adds. “Today I’ll say this is a skill-based game, tomorrow someone else says poker isn’t skill-based. There’s no end to that.”
The absence of a unified regulatory approach is perhaps one of the greatest challenges facing the Indian gaming sector. While companies like Zupee have proven that it’s possible to scale and turn a profit despite these challenges, the industry as a whole could benefit from clear, centralized regulations that provide long-term stability. For Malhi, the future of the sector depends on a collaborative effort to build a robust framework that balances innovation with responsibility.