Delta Corp pauses casino investment due to tax rises
India has announced tax reforms that will see rates go up from 28% to 40%. Fallout has caused Delta Corp to shelve plans to invest in a new casino-cum-resort in Goa.
Key points:
– Reform puts casinos in a new higher 40% bracket
– Delta Corp had planned to invest up to Rs 2500 crore ($284m) in the project
– Investment is now on hold
On 3 September the Indian Goods and Services Tax (GST) Council gathered and approved the framework for a revised taxation system.
The top rate, which impacts gambling in the country, is getting boosted from 28% to 40%, a rise which has stopped Delta Corp’s plans for a new resort-cum-casino in their tracks.
Delta Corp is involved in operating real money gaming enterprises through its casino hotels, and it had been prepared to make an investment of up to Rs 2000-2500 crore ($284m) into a new such development in Dhargal, Goa.
Only three Indian states have legal casinos, and these must be integrated in a five-star hotel or an offshore vessel with the Government’s approval.
Before GST 2.0 was approved, Chairman of the Mumbai-based company, Jaydev Mody, said: “The 40% GST contemplated will make the entire sector unviable.”
The decision comes fresh from the announcement of a total ban on remote gaming in the country, which is causing mass lay-offs.
Delta Corp’s shelving of the project and retaining of the investment created a significant Rs 12 uptick in the company’s BSE share price, although that fell steeply back by Rs 7 when Prime Minister Modi announced the agreement on the proposed cuts and reforms.
The new classifying of casinos as “goods” in law allows them to be taxed heavily due to their perceived social harm.
Good to know: Q2 profit was down 82% quarter on quarter for Delta Corp and the results report expressed concern over the tax uncertainty
Prime Minister Modi posted on X: “The wide-ranging reforms will improve lives of our citizens and ensure ease of doing business for all, especially small traders and businesses.”
Chairman Mody of Delta Corp had said the company would wait for clarity on GST issues before progressing with its plans to build the resort that was due, according to him, to create direct employment for 10,000 people.
The operator’s next steps following the reforms’ approval will be eyed carefully by the market.
Gambling Insider delivers the latest industry news, in-depth features, and operator reviews that you can trust. Our team combines rigorous editorial standards with decades of specialized expertise to ensure accuracy and fairness. We are committed to delivering clear, impartial, and dependable coverage across the global gambling sector.
