E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
This case study has been created in association with 9stacks.com – India’s fastest growing
online real money poker platform.
9stacks.com is India's best real money online poker platform, having a rock solid platform, intuitive
user interface and transparent financial systems. It has unique what-you-see-is-what-you-get
promotions and it is fully compliant with all Indian laws.
This case study is a copyright of E-Cell – Entrepreneurship Cell of IIM Ranchi
EnCase 3.0
The Flagship Case Study Event
E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
Directions to participants: Focus on the italicized lines in the case study
below, and answer any/all of those questions in your responses. Please
don’t just copy facts. You might be right or you might be wrong, but
make sure you have a point of view! Shorter presentations will be given
more marks.
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On a warm afternoon of September 2018, Sudhir Kamath, Chief Executive of
9stacks Gaming, sat at their office in Vasant Kunj, New Delhi with his co-
founders, Abhinav Nigam (COO), Pratik Kumar (CMO), and Rishab Mathur
(CTO), to discuss the future for their company and the roadmap ahead. They
had founded Sparskills Technologies Private Limited, just a year ago in mid-
2017, and launched 9stacks.com around Diwali of 2017. Since then, 9stacks
had become India’s fastest growing real money online poker platform, on
the back of its rock solid platform, intuitive user interface and transparent
financial / taxation processes. It was on track to achieve their goal of creating
India’s best platform to play poker online for both casual as well as seasoned
poker players.
9stacks had raised a massive Rs. 10 crore in an angel-funding round
announced in December of 2017 – the largest angel round in this industry,
and possibly across all Indian startups last year. More recently, 9stacks had
raised a second round of funding in a $3M+ Series A led by an institutional
investor. While the round hadn’t been announced, the money was in the
bank and ready to deploy. The question was: where should they allocate their
funds to maximize growth?
Until now, 9stacks had been exclusively focused on the Indian online poker
market, and had seen its user base nearing 1 lakh+ subscribers in less than a
year. They were well on course for their stretch goal of reaching the #1 slot
in the Indian poker market in the next 2-3 years. They understood what
E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
needed to be done in that market, and had built a good execution engine for
getting that done. Best of all, the Indian poker business was already nearing
cash breakeven. Therefore, the Indian poker market was not the focus of
discussion.
The 4 co-founders reflected on the year they’d had, and were debating the
merits of 3 main expansion strategies beyond the Indian Online Poker
Market:
Should they launch real-money poker in other international markets?
Should they launch other real money skill-gaming apps in India -
rummy and fantasy league were already big, and quiz showed early
signs of promise – should 9stacks widen its offerings for its existing
customers?
Should they launch free apps such as teen patti, non-money poker,
casino games, etc.? Should they see these as independent revenue
streams (through in app purchases or advertisements), or mainly as
feeders to the online poker business?
Of course, it wasn’t a clear-cut choice. Should they take up one of these
options, or even try all three? Did they have enough team strength and
institutional capacity to execute more that one of these? Was there a risk
they would miss the bus if they didn’t try all three?
For any markets that they got into, they wanted to make sure they had a
clear vision of how they could succeed against incumbent competition. A
year back when they had started 9stacks.com they had a clear plan to bridge
the gaps they saw in the online poker industry: they wanted to create a
simple user interface, what-you-see-is-what-you-get promotions, the
industry’s fastest cashouts, and establish user trust by adopting policies that
were 100% safe and legally compliant and strongly communicating that they
are here to stay for the long run, both as companies and as individuals. For
any new market they entered, they needed a similarly clear view on how they
would compete and succeed.
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E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
ANNEXURES
The Online Poker Industry in India
After achieving success in the US, UK, China and other European nations, poker has received
widespread acceptance as a game of skill in India. In this digital era, more and more players are
becoming part of the Poker bandwagon online. According to an Economic Times report, the current
online poker industry is estimated to be at around $120 million. As per filings with the Corporate
Affairs ministry, online poker players collectively reported revenues of around $50M in FY 2018,
and growing at about 60% per annum. The difference could be explained by various online and
offline games that were ostensibly without real money but where wagering and settling would
happen offline – a much riskier market for players, and one which was getting replaced by legal
online poker companies.
The emergence of various new online gaming portals also indicates the growing demand for poker
among the Indian masses. Acknowledging the growing craze for the game in the country, the
experts of this industry believe that India will be the next big market for poker games online.
According to statistics published by MECN (Media Entertainment Consulting Network), Asia and
primarily India is easily the largest and fastest growing online gaming market in the world. The
issue of accepting poker as a game of skill is currently like a snowball — the more it rolls, the
larger it gets. Over the years, the poker industry has tried to focus on changing the perception that
people have had about the game. Estimates say that close to a million players in India are currently
play real-money poker on a regular basis. But overall, governments are waking up to the fact that
huge revenues are generated through the game. The Indian poker market is growing from strength
to strength with Internet and smartphones becoming easily available for the masses. This has, in
turn, created a large market and given impetus to the online poker industry to keep moving ahead.
For poker companies, 80% of all the online poker players are in the 18-30-age bracket. Most
new players were initially exposed to the game at college or during their first/second jobs, usually
playing poker (with friends) physically with poker chips, with or without any money being
involved. Over time, many of these players would try playing online (with friends or strangers),
often on sites like Zynga Poker or Facebook, without any money. Eventually, some of them would
realize they are good at the game and those would take it up more seriously, playing with real
money on online sites. The nature of this player journey makes it a very execution-driven industry,
as good operators have to ensure the site is fun enough for beginners/ casual players as well as
serious enough for the more regular players.
Poker has been gathering pace for the past 10 years or so in India, and the industry is on the verge
of a massive poker boom. It‘s believed that online poker is going to change the face of gaming in
India in the next 5 years. As an industry, it is important to bust the social myths about poker
considered gambling and take it forward in the coming years. As more people play the game, they
understand that it can be as competitive as other mind sports like chess or scrabble, and can be as
much fun as Fortnite or Temple Run!
Legality and regulatory uncertainties
Overall, the view was that it was fully legal and safe for 18+ Indian citizens to play online poker
from most Indian states.
In India, each state has its own laws governing wagering and betting. Typically, the law was
targeted at preventing ―gambling houses‖ that could become ―dens of vice‖ and there was
an ongoing legal debate on its applicability to online businesses.
E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
In most states, the laws on gambling made a clear exception for ―Games of Skill‖ – i.e.,
games where players would need to be skilled to be successful in the long run. Some states,
such as West Bengal, specifically listed poker as a game of skill, though most state laws
were silent on the list and left it to courts to determine if a particular game was a game of
skill. The general perception and current judicial precedent held that poker, rummy, bridge,
draft-based fantasy sports, and quiz were games of skill, while teen patti, blackjack, roulette
etc were ―games of chance‖ that would get classified as gambling.
The laws of three states – Assam, Orissa, and Telangana – did not make any exceptions for
games of skill, so all online operators (including 9stacks) did not allow players from these
states to sign up or play on their platform. Most poker operators used IP-based detection of
location (which was error prone), but 9stacks insisted on checking precise geo-location.
Users that didn‘t allow detection of their location were not allowed to log in to 9stacks.
All real-money games were generally restricted to ages 18+. 9stacks enforced this strictly
through compulsory KYC (―Know your Customer‖) requirements including electronic
verification of details from PAN cards and bank accounts
The tax treatment of winnings from online gaming fell under the definition of ―windfall‖
gains along with lotteries, Kaun Banega Crorepati winnings etc. These winnings were liable
to tax at a flat 30% and the operator company was required to deduct tax at source every
time a player won more than Rs 10,000. However, the definition of ―winning‖ was
somewhat ambiguous, and different companies interpreted it differently. 9stacks had
developed a ―dual chip‖ system to streamline this for its users and reduce ambiguity.
Unlike other developed markets like Europe and Australia, there was no regulator for online
gaming / wagering in India. As a result, most companies followed their own judgment on
legal / tax matters. More recently, operators had come together to form an industry body
called the All India Gaming Federation and were moving towards self-regulation through
adopting certain common principles on key matters. 9stacks was a member of this body.
9stacks.com business model
It‘s an online poker platform known industry wide for its availability on all platforms- Android,
iOS, Mac and Windows. Users can play directly on their browsers as well. It has an innovative
what-you-see is what-you-get promotions and offers that are never misleading or exaggerated.
Managed by four experienced IIM-IIT founders (Sudhir Kamath, Abhinav Nigam, Pratik Kumar
and Rishab Mathur) but apart from the degrees, each of them also has many years of experience in
building strong and differentiated businesses.
As passionate poker players and facilitators, they believe that creating a great gaming experience
for the users irrespective of their skills levels, will be key to the growth and acceptance of this mind
sport. They believe that if you offer a safe, fun environment with a good, intuitive interface, users
will spend more time and make the effort to learn the game and get better at it.
The basic business model is to offer online poker as a service, for which a service fees or ―rake‖ is
collected from each hand played. Typically, 4% of the value wagered in a hand would be retained
by the poker company, though the exact percentage would vary between companies. All the
established poker companies in India collectively recorded more than Rs. 6250 crores of gross
E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
wagering volumes last year, translating to a net rake revenue of more than Rs. 250 crores. There
has been a 50 per cent increase in this gross revenue, Year on Year, which shows no signs of
slowing down in the foreseeable future. In 3 years, 9stacks expects to have a 35% share of the
market.
In terms of numbers, 9stacks is nearing a user base of 1 lakh+ subscribers. More than 3 million
hands of poker are being played every month on the platform. Monthly gross transactions
exceeding $5 million per month and growing rapidly. They‘ve had plenty of months where they‘ve
doubled revenues month on month.
Wins and Lessons
1. Vegas Promotion
9stacks had launched a 4 month long #LFGVegas challenge with the aim of taking a team
of talented and passionate poker players across the country to Las Vegas during the WSOP
season this summer. This was a huge success and first time ever someone had ever done
this in the online poker industry in India. 25 players flew to Las Vegas to give a boost to
their poker career and played the World Series of Poker 2018 live in Las Vegas. Two of the
players – Nishant Sharma and Vivek Rughani – became the first Indians ever to reach the
top 100 of the event, winning more than Rs 2.5 crores in the process. At less than 30 years
of age and having started playing poker seriously in the last four years, they were
representative of the new Indian poker player segment.
2. Women in Poker
9stacks proudly considers itself as a women friendly poker platform having an exclusive
ladies night tournament that is invite only for both experienced and new women players to
try their skills at this game. 9stacks also sponsored 9 Women (―9 Missketeers‖ as they call
them) who recently rocked the DPT Goa Poker tournament representing the online skill-
based gaming website. Despite these efforts, women currently constituted less than 10% of
total players on Indian poker sites including 9stacks.
3. Online and mobile experience
9stacks is available on all platforms- Android, iOS, Mac and Windows and users can play
directly in their browser as well. This presence of 9stacks across platforms makes it a
smooth experience to play poker on the go. Typically, casual players would first experience
9stacks from their phone / computer browsers (without downloads). Over time, some of
them would move to iOS / Android apps, and a smaller number would use the
Windows / Mac downloadables that would also allow players to smoothly play multiple
tables at once – some of the pros would regularly play 6-8 tables in parallel, maximizing
their earning potential per hour invested.
Key USPs
1. Promotions: It has had some of the best promos and offers across the industry, starting
with the Vegas promotion where 9stacks took 25 people to Las Vegas WSOP as part of
―9stacks Team India‖! Rather than spending money on a small set of ―pros‖ representing
their site, 9stacks preferred to send a number of people to play across the world and make
E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
their poker dreams come true. They‘ve designed their promos to be very transparent – there
are no outrageous hidden clauses and are a feedback driven, data driven company. And
there is always an element of fun to what they do.
2. Cash-outs: Any one who has made money on 9stacks, has always been able to cash out
smoothly. A two hour money out guarantee for any cashout between 10 AM and 8 PM, any
day of the week including national holidays is proudly boasted by the company. In coming
months, they‘ll make it even faster for their regular customers.
3. Safety: They have been very clear from Day 1 that user money and ‗their‘ money are
separate and need to be kept in separate accounts. The money raised from investors is used
for all the company‘s overheads as well as marketing expenses – user money stays
segregated, and that is one reason why they can guarantee superfast cash-outs.
4. Taxation: 9stacks users have the peace of mind that taxes are paid correctly. It is the first
poker company in the industry to adopt a ‗dual chip system‘ for all its tables. The industry
followed its footsteps and has taken it up seriously and they expect the dual wallet system to
become the norm across websites. To explain – let‘s say a user plays on one of 9stacks‘
competitors, wins Rs. 5,000 in one session, and loses Rs. 5,000 in the next. The user
assumes he has won zero overall and doesn‘t need to pay taxes. Unfortunately, the taxman
may take a different view, and ask for tax on the 5,000 winnings without allowing set off of
the 5,000 loss. The ‗Dual chip system‘ at 9stacks helps avoid this problem for its
users. When tax authorities start assessing player‘s poker income, the players can be rest
assured that their taxes are taken care of.
Trends driving market expansion
• Increase in use of technology, online gaming sites, online certifications of games involving
real money
• Increase in disposable income, increased spends on entertainment.
• People are switching over from old school card games like Teen Patti, etc to Poker because
of its coolness factor
• Increasing use of E-wallets and online transactions
• Increasing use of online shopping websites.
• Top educational institutions introducing Poker in their curriculum to recognize it as a game
of skill for people who love logic, and strategy oriented games and are good at math.
Key Market Segments
Millennials
Young Adults
Current Students or alumni, especially those who lived in college hostels
Some older players, especially those who were educated abroad
Employees in new age industries like tech / IT, startups, analytics, banking and
outsourcing
E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks.com
This case study has been created in association with 9stacks.com
Brand
Over the last year, 9stacks has established its brand in the online Poker community in India and is
considered as one of the top platforms to play Poker safely. In terms of the brand language and
visuals, 9stacks is seen as fresh, youthful, and fun. 9stacks‘s choice of bright colours and cheerful
imagery on its website as well as all promotions is targeted towards its new users, including women
and millennials. It is quite different from the dark colours and overtly glamourous imagery
employed by many competitors who are visualizing online poker as an extension of casinos.
Automation of Processes
Internally, 9stacks has focused on the maximum possible automation of day-to-day business
processes. One example is the seamless best in class cash-outs where users are guaranteed cash-iuts
within two hours for all cashout requests made during the day, any day of the week. This contrasts
with the typical industry average of 3-4 days that was prevalent before 9stacks launched. Since its
launch, some competitors have now moved to similar 2-hour cashouts, and even experimented with
instant cashouts. However, some operators seem to be taking significantly higher risks of frauds
and collusion between players – whereas 9stacks has managed to ensure payouts within 2 hours
even after completing all its checks.
Machine Learning
Real-time processing based on machine learning algorithms, especially in risk management makes
the system uncompromising in dealing with threats and risks which ensures safety in the user‘s
mind. In addition, application of machine learning to revenue maximization / churn reduction was
another area of continued improvement.
Skills Dashboards
9stacks.com was the first site to launch a Skills Dashboard, whereby users could have an in-depth
analysis of their own poker strategies, based on real data for all the hands they‘ve played on the
platform. This ―free / by invitation only‖ feature was currently available to regular players on the
platform and helped them improve their poker skills. Similar third party softwares typically
required paid subscriptions. In the coming months, further enhancements were in the pipeline to
provide an interactive and effortless interface for the Skills dashboard that could also get used by
relatively newer players.
Directions for Submission:-
1. Participants should submit the solution in a zip folder, necessarily containing the
presentation (in ppt format with no minimum or maximum no. of slides).
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3. Naming Convention for the folder : Encase_<TeamName>_<CollegeName>
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