E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks · 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

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



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



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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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.



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



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



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



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).

2. The folder may also contain working notes in excel or word format, if any (not mandatory)

3. Naming Convention for the folder : Encase_<TeamName>_<CollegeName>

4. Only one member per team (any one) must send the deliverables via email to e-

[email protected], with Subject Line reading “Encase Submission || <Team Name> ||

<College Name>”

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E-Cell, IIM Ranchi EnCase || AGON 4.0 9stacks · 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