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Flutter Entertainment, the parent company of global online poker giant PokerStars, has been consolidating its position as a global leader in the gaming industry. The company already operates (via Sachiko Gaming Pvt Ltd) the ring-fenced PokerStars India poker platform. Looking to diversify into online rummy, it has acquired a majority 50.1% stake in Indian online rummy operator Junglee Rummy for $66.2 Million (₹482 Crores). Flutter has the option to buy the remaining 49.9% of the company by 2025.
Flutter, a global sports betting, gaming, and entertainment provider, also owns Paddy Power, Betfair, Sky Bet, Sportsbet, FOX Bet, TVG, and Adjarabet. Meanwhile, Junglee Rummy, an erstwhile subsidiary of the fast-growing Junglee Games, owns Eatme.io, Junglee Teen Patti, and Howzat.
This is the first reported investment in online rummy by Flutter and confirms its intentions to dig its heels deeper in India. Junglee has recently come out with a fantasy sports product. Hence its foray into the burgeoning Indian DFS industry looks imminent.
Started in 2012 by San Francisco-based Ankush Gera, Junglee Games claims to have 50 million registered users. The start-up raised $3.5 Million in 2013, and by 2019, it had acquired 17 million users and crossed $600 Million in Gross Transaction Value (GTV).
In its financial report, Flutter wrote that based on its December 2020 run-rate, Junglee Rummy, a top-three online rummy operator in India, would generate annualized gross revenue of $69.7 Million.
“The group sees a good potential to further develop Junglee’s product offering, including its recently launched daily fantasy sports product, leveraging the group’s capabilities in this area,” read Flutter’s report.
Last December, Flutter announced that it is buying out the 37.2% stake of Fastball Holdings LLC in the daily fantasy sports betting operator FanDuel.
Talking about Flutter’s acquisition policy, the Chief Financial Officer (CFO) of Flutter, Jonathan Hill, said, “We see real possibilities in regulated markets.” However, he added that the company would not list likely targets to avoid alerting rivals to its possible intentions.
Hill stressed that Flutter would stick to its strategy of buying businesses with a top-three position in regulated countries. He noted that businesses with early leading positions in these markets tended to benefit disproportionately.
The real-money gaming industry, specifically online rummy, has recently met several legal roadblocks in India, especially in the southern states. South India in the heydays was a haven for the online rummy industry. Still, over the past few years, the state governments of Telangana, Andhra Pradesh, Tamil Nadu, and Kerala have banned and criminalized real-money gaming. The only southern state left is Karnataka which will most likely join this club soon.
Last year, Junglee Games filed a writ petition with the Madras High Court challenging the constitutional validity of an ordinance promulgated by the Tamil Nadu government on November 21, imposing a ban on any game played for stakes on the internet. The High Court denied the request for an interim stay on the real-money gambling ban in Tamil Nadu. Several legal challenges by other rummy operators have been made in other states. None of them have met any success.
However, despite the declining trend for the RMG industry in the southern states, the industry has been blossoming in India. The Indian mobile gaming market had 326 million mobile gamers in 2020, and the market is expected to grow at a CAGR of 6.1% and reach a market size of $1.6 billion in 2025.
While Flutter already has a presence in the Indian online poker market through PokerStars India, the company has solidified its position further by getting a foot in the online rummy domain through its latest acquisition. Is fantasy sports next on the list?