Mobile Premier League lays off 350 employees; attributes cost cutting to increased GST burden

Bengaluru-based online real money gaming company Mobile Premier League (MPL) has said it is letting 350 of its employees go, in light of the recent decision by the goods and services tax (GST) Council’s decision to levy 28% tax on the sector at full face value. This would be nearly 50% of MPL’s team size, sources said, underscoring the impact of the measure.

In an internal email sent to the staff on August 8, MPL cofounder and chief executive Sai Srinivas wrote, “Last week, it was confirmed that a 28% GST will be levied on the full deposit value rather than on gross gaming revenue (GGR). The new rules will increase our tax burden by as much as 350-400%. As a business, one can prepare for a 50% or even 100% increase, but adjusting to a sudden increase of this magnitude means we need to make some very tough decisions”. ET has reviewed a copy of the email.

The GST council on July 11 had decided to impose 28% tax on online gaming at full face value. This came as a surprise to the gaming industry, which had been batting for tax to be levied on the GGR, or the platform fee, charged to users.


Following the announcement, stakeholders of the online gaming industry, including companies and investors, had made multiple appeals to the government, urging for a relook into the new tax rules.

While the new tax regime has not kicked in yet, the industry expects a manifold rise in tax costs as a result of the 28% GST on online gaming. Investors of online real money gaming companies had also submitted representations to the government that the decision could lead to a potential write-off of the $2.5 billion capital invested in the sector.

“As a digital company, our variable costs predominantly involve people, server and office infrastructure. Therefore, we must take steps to bring these expenses down in order to survive and to ensure that the business remains viable. We have already initiated work on revisiting our server and office infrastructure costs,” Srinivas said. “However, despite this, we will still have to reduce our people related costs. Regrettably, we will have to let go of around 350 of you,” he added.

ET reported last week that the online gaming industry was looking at potential layoffs and hiring pullbacks because of the 28% GST.

Srinivas said the company reported positive earnings before interest, taxes, depreciation and amortisation (EBITDA) in December 2022, and recorded the best ever month in terms of business performance in June this year.

So far, MPL has raised $396 million in funding and commanded a valuation of $2.19 billion, according to information sourced from Tracxn. The company closed its $155 million Series E funding round in May last year that saw investments coming in from Base Partners, Telstra Ventures, Google Ventures, SIG Venture Capital and Peak XV Partners (formerly Sequoia Capital India).

Times Internet, a part of the Times group which publishes this paper, is an early investor in MPL.

For the year ended March 2022, MPL reported operating revenues of $65.6 million, recording a 29% increase from the previous year. Its losses ballooned nearly three times to $148.2 million. MPL’s parent entity is based in Singapore. During FY22, the company clocked $58.7 million in employee costs, out of the total expenses of $215 million.

Founded in 2018 by Srinivas and Shubam Malhotra, MPL offers around 70 games across categories such as fantasy sports, card games, board games, esports, and casual games on its Android and iOS apps. It claims to have over 90 million users across India, and other overseas geographies like Europe and the US.

The company had laid off 100 people in May 2022, in addition to exiting the Indonesian market, amid a slowdown in the larger technology ecosystem.