India: Nazara Technologies considers write-down on PokerBaazi stake
Company flags potential accounting adjustment amid online betting changes.
Key points:
– Nazara Technologies may reduce the recorded value of its investment in PokerBaazi following a possible ban on online betting in India
– The company said its consolidated revenue and EBITDA are unaffected, as Moonshine Technologies’ earnings are not included in Nazara’s accounts
Nazara Technologies has announced it may write down the value of its stake in PokerBaazi due to regulatory uncertainty over online betting applications.
Nazara owns a 46.1% stake in Moonshine Technologies, which operates the PokerBaazi platform. Any write-down would reflect regulatory uncertainty and would not affect Nazara’s consolidated revenue or EBITDA since Moonshine’s results are not included in its financial statements.
Following the announcement, Nazara shares fell by as much as 11%, extending a decline seen in the previous trading session.
The potential accounting adjustment is a precautionary measure and that the company is monitoring the situation in consultation with auditors to ensure compliance with accounting standards.
Good to know: The proposed write-down is intended as a conservative accounting measure rather than an indication of operational issues
Investor caution over companies like Nazara is directly tied to the proposed real-money online gambling bill currently under consideration in India’s Parliament.
If passed, the legislation could prohibit online gambling operations and advertising, creating regulatory uncertainty that affects valuations and market sentiment.
Nitish Mittersain, Nazara CEO stated: “It’s still early days and I’ll have to sit with my auditors, but we tend to be conservative in our accounting.”
Nazara, as India’s only listed gaming company, operates within India’s expanding online gaming market, which has seen a sharp increase in users and market value over the past five years. The company’s position in the sector may be affected by potential regulatory changes under consideration.
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