Delta Corp Witnessed a 28% Fall after GST Imposed on Casinos
Shares of Delta Corp, India’s only listed casino operator, suffered a significant blow with a 28% fall in a single day. The sharp decline came as a result of the GST Council’s decision to impose a 28% Goods and Services Tax (GST) on casinos. The news sparked a wave of memes on Twitter, with users expressing their opinions on the matter.
The stock, which was a favorite among traders and was once a part of Rakesh Jhunjhunwala’s portfolio, plummeted to Rs 193.40 on the National Stock Exchange (NSE) at 12:45 pm. This represents a staggering 21% drop from the previous close, hitting a low of Rs 172 intra-day. Notably, this is the largest single-day drop the stock has ever experienced.
Delta Corp’s growth story now faces a major hurdle with the introduction of the new GST rules. Previously, offline casinos paid 28% GST on the gross gaming revenue. However, under the new rules, players must now pay 28% GST on the full face value of chips purchased for playing. This means that for every Rs 100 worth of chips bought, the player only receives Rs 72 to bet with.
The implementation of the new GST rules poses significant challenges for customers. In order to win, players must first recover the GST deducted from the total amount paid and then adjust their gameplay accordingly. This shift may deter some players and impact the overall revenue for casinos.
Furthermore, Delta Corp’s subsidiary, Deltatech Gaming Limited, formerly known as Gaussian Networks, has also been hit by the 28% GST tax on online gaming. The company has been a leader in India’s online gaming industry since 2011, and its initial public offering (IPO) has been eagerly awaited by the market. However, the future of the IPO remains uncertain following the introduction of the new tax.
Investors were also banking on Delta Corp obtaining a casino license in Daman, which could have significantly boosted the company’s revenue. However, the Mumbai High Court has yet to pass its judgment on the matter, further adding to the uncertainty surrounding the stock.
Overall, Delta Corp is facing multiple challenges due to the introduction of the 28% GST on casinos and online gaming. The stock’s dramatic fall reflects the market’s concern over the potential impact on the company’s future growth. As the situation unfolds, investors and industry experts will be closely watching for any developments that could shed light on the way forward for Delta Corp.
