PhonePe recorded a sharp fall in revenue from real money gaming during the first half of FY26 after India implemented a nationwide ban on the segment. The decline comes as the Walmart-backed fintech prepares for a public listing, as outlined in its updated draft red herring prospectus.
According to the filing, PhonePe earned ₹71 crore from real money gaming between April and September FY26, down from ₹147 crore in the same period last year. The company linked the decline directly to regulatory changes that halted gaming-related operations partway through the reporting period.
India enforced the Promotion and Regulation of Online Gaming Act, 2025, with effect from August 22, 2025. The legislation prohibited real money gaming nationwide and ended related commercial activity. PhonePe stated, “We ceased to generate revenues from advertising and payment gateway services associated with real money gaming with effect from August 22, 2025.”
Regulatory Impact Cuts Off Gaming-Linked Income
Before the ban, PhonePe generated income from the gaming sector by providing advertising placements and payment gateway services to operators. This revenue stream ended once the law took effect. The company did not disclose any alternative gaming-related arrangements under the current regulatory framework.
Real money gaming had contributed steadily to PhonePe’s earnings in recent years. The company reported ₹245 crore in RMG revenue in FY25, following ₹234 crore in FY24 and ₹208 crore in FY23. The contraction in H1 FY26 reflects the removal of gaming-linked income for part of the year.
Despite the decline, PhonePe said the loss of gaming revenue did not materially affect its overall financial performance.
Core Business Posts Continued Revenue Growth
PhonePe’s revenue from operations rose to ₹3,918 crore in H1 FY26, compared with ₹3,207 crore in the corresponding period last year. The increase represents year-on-year growth of 22 percent, supported by the company’s payments and financial services business.
For the full FY25, PhonePe reported total revenue of ₹7,114 crore. The company continues to rely on its broader digital ecosystem rather than gaming-linked income to drive topline growth.
Losses have narrowed over the longer term. PhonePe reduced its annual loss to ₹1,727 crore in FY25, down from ₹1,996 crore in FY24 and ₹2,796 crore in FY23. However, losses widened during the first half of FY26 to ₹1,444 crore, compared with ₹1,203 crore in the same period a year earlier.
Marketing Expenses Rise As IPO Approaches
Advertising and sales promotion spending increased to ₹455 crore in the six months ended September 30, up from ₹307 crore in the year-ago period, accounting for 7.51 percent of total revenue. PhonePe expects elevated marketing expenses to continue.
The proposed IPO will consist entirely of an offer for sale of 5.06 crore equity shares. Promoter WM Digital Commerce Holdings holds a 71.77 percent stake and plans to sell 4.59 crore shares. Tiger Global PIP 9-1 and Microsoft Global Finance Unlimited Company will sell the remaining 47.17 lakh shares. General Atlantic Singapore PPIL holds 8.98 percent, while Headstand owns 5.73 percent.
Source:
"PhonePe’s RMG revenue drops to Rs 71 crore in H1 FY26 after regulatory ban", storyboard18.com, January 22, 2026
