Stride Investments spent $5.0m (£3.9m/€4.6m) for a 51% stake in Passion Gaming back in 2017. Rank then inherited the stake when it acquired acquired Stride in October 2019.
Bobby Garg and Priya Kumar, co-founders of Passion Gaming, will now buy back the holding. Financial terms of the repurchase agreement have not been made public.
Rank revealed it had agreed to sell its stake in Passion Gaming when posting its Q1 results in April, but did not state who would buy the stake.
Passion has “full autonomy” to pursue vision for RummyPassion.com
Passion Gaming operates the RummyPassion.com site and currently boasts over 10 million registered players. Stride originally acquired a stake in the business with an eye on expanding into India and the original deal included a provision to acquire the remaining 41% in three to five years.
However co-founder Kumar said acquiring full ownership allowed Passion Gaming to “pursue [its] vision with full autonomy”.
Garg added: “We hold an optimistic view of the future for skill gaming in India. Navigating the complexities of taxation and hopeful of a positive regulatory setup in the skill gaming industry, we aim to reach 10 crore (100 million) registered users on Rummy Passion over the next three years to establish a significant leadership role in the rummy market.”
Passion Gaming secures stay on GST claim
Passion Gaming was one of 71 online skill gaming businesses issued a hefty tax bill in the wake of India’s government applying the Goods and Services Tax (GST) to online gambling. Last July the Goods and Council Tax Council (GST) applied the 28% tax on the face value of bets, landing operators with a hefty bill for Indian activities.
This was later determined to apply retrospectively and 71 operators – including Passion Gaming – were issued with tax bills. Across the 71, this totalled INR1.2 lakh crores (£112.25bn/€132.82bn/$143.72bn).
Passion claims to be the only operator to receive a demand order – a written notice from the GST Council asking for the tax to be paid – and challenged the order in the Punjab and Haryana High Court. It secured an order temporarily pausing the judicial proceedings.
Indian government must implement fair taxation policies
International operators such as Super Group have already pulled out of India as a result of the tax. Operators such as Passion continue to call for change, to apply the tax to gross revenue rather than turnover.
“We hope the government seizes this opportunity to put India in the pole position globally in the gaming sector by fostering entrepreneurship in skill gaming and implementing fair taxation policies,” Garg said.
“We’re optimistic that with our continued commitment to player protection the skill gaming sector can prosper. We keep our faith in the present progressive government, which we feel can regulate the skill gaming to differentiate permissible games from betting and gambling.”
The GST Council met in June, but the tax on gambling was not discussed. The council next meets in August.
Original article: https://igamingbusiness.com/strategy/ma/passion-gaming-rank-group/
