Dream11 Returns Home from USA

Nitin Konde

31 Mar 2025 — 3 min read

Dream11 returns home from USA

Dream Sports, the parent business of the fantasy sports website Dream11, has shifted its headquarters from the US to India. With this, it has become the first modern corporation to take advantage of a law change that was implemented last year. The US-based company Dream Sports Inc. has reverse-flipped by merging with its Indian affiliate Sporta Technologies. Bypassing a crucial approval that typically takes months, this was accomplished using a fast-track procedure. The national government loosened regulations governing cross-border reverse mergers in September 2024. This move has enabled businesses to request permission from the Corporate Affairs Ministry's regional director following approval from the Reserve Bank of India. In the past, businesses required approval from the National Company Law Tribunal (NCLT), which had a backlog of cases.

Why Dream 11 Shifted its Headquarters?

Dream Sports' decision comes after online gambling companies were hit with a hefty Goods and Services Tax (GST) demand of INR 1.1 lakh crore, which included retroactive demands. The Supreme Court has temporarily halted the demands after businesses contested these notices. Since Dream Sports has not passed the tax burden on to users, it is anticipated that its profit margin will drop by more than 60%. Local IPOs, which formerly offered high values prior to the recent market slump, are being targeted by many companies that are returning to India. Changing domicile also aids financial companies in navigating more stringent laws.

Financial Outlook

Dream11's FY24 annual statements have not yet been submitted. The company's fiscal year ended in March 2023 and saw profits of INR 188 crore, a 66% year-over-year increase to INR 6,384 crore. Dream11 now joins companies like Zepto, Groww, and PhonePe that have moved their headquarters to India. Reverse flips have also been the focus of several businesses, including Flipkart, KreditBee, Pine Labs, Razorpay, and Meesho.

SC Halts GST Action Against Online Gambling Businesses

On January 10, the Supreme Court halted proceedings related to the Goods and Services Tax (GST) against 49 online gaming companies. The decision was made as they had received demand notifications in the past. This judgment caused some of the listed companies' share prices to rise. Online gaming companies that had been served with show-cause notices for allegedly evading INR 1.1 lakh crore in GST. These notices were relieved by the SC's stay. The total responsibility might be INR 2.3 lakh crore because the GST Act permits the government to levy a penalty equal to 100% of the tax demand. Authorities viewed the GST Council's October 2023 imposition of a 28% tax on the face value of online gambling bets as a clarification and increased tax demands for the time frame before the ruling. The "retrospective" GST notices have been contested by a number of online gaming operators. Instead of using the face value of bets, the gaming industry has been pushing for the tax to be based on gross gaming revenue (GGR). Prior to the ruling, the corporations were taxing platform fees or GGR at an 18% rate.