Dream Sports, the parent company of popular fantasy sports platform Dream11, witnessed a substantial 66% increase in revenue from operations for the financial year 2023, reaching Rs 6,384.49 crore compared to Rs 3,841 crore in FY22. The company’s consolidated revenue grew by 62%, totalling Rs 6,581 crore in FY23. Profit after tax also saw a significant growth of 32.4%, reaching Rs 188 crore.
Money Control reported on the robust financial performance of Dream Sports which was detailed in the latest filing with the Registrar of Companies. Dream11’s standalone revenue for FY23 stood at Rs 6,590 crore, reflecting a growth of 62.4% from FY22. Revenues from operations soared by 66.3%, reaching Rs 6,375 crore. Profit after tax recorded a notable increase of 51.7%, reaching Rs 223 crore.
Dream Sports, housing various brands such as FanCode, DreamSetGo, Dream Game Studios, and Dream Sports Foundation, continues to dominate the fantasy sports sector. However, the company faces challenges, including a significant show-cause notice for the period between July 2017 and March 2023 for alleged GST evasion and non-payment of 28% GST on the face value of bets, amounting to over Rs 28,000 crore.
Despite concerns raised by the auditor regarding the potential impact of the show-cause notice, Dream Sports remains confident in its ability to overcome the challenges. The company plans to contest the tax demand, asserting that the GST department’s claim lacks legal sustainability. The ongoing dispute stems from the recent imposition of a 28% GST on the real-money gaming sector, which came into effect on October 1, 2023.
Dream Sports, like many other real-money gaming companies, is grappling with retrospective tax demands from Indian authorities. The new tax rates are expected to have a significant impact on revenues and profitability, potentially leading to a 40-50% drop in revenue for the current financial year.
The company has filed responses and plans to defend its position, highlighting that its current business model does not involve gambling or betting. Dream Sports spent substantially on advertising and promotions during FY23, particularly during marquee sporting events like the Indian Premier League. The company’s advertising and promotional expenses grew by 37.3%, reaching Rs 2,964 crore. Additionally, employee benefit costs surged by 2.3 times to Rs 1,154 crore.
While Dream Sports faces challenges from the evolving regulatory scene and tax implications, its robust financial performance in FY23 underscores its position as a major player in the fantasy sports industry.