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Delta Corp shares plunge on news of hike in Casino license fees

Delta Corp Ltd ended at Rs 250.35 down by Rs 47.9 or 16.06% from its previous closing of Rs 298.25 on the BSE. The stock traded below its 50 DMA on account of the fact that the government has revised the fee structure for onshore as well as offshore casinos, applicable starting April 1, 2018.

The non-refundable security deposit has been hiked from Rs20lakh to Rs50lakh, which is to be paid at the time of grant of new license. While the security deposit for renewal has been increased to Rs 25lakh from existing Rs 10lakh. Fees for renewal of license for both onshore and offshore casinos is increased from Rs 30 lakh to Rs 1cr.

The recurring fees for casinos having space above 300 sq mt up to 500 sq mt have been hiked from Rs 5.50 cr to Rs 25 cr; for space between 500 sq mt to 750 sq mt the new rate is Rs32cr from current Rs7cr; for above 750 sq mt up to 1,000 sq mt the fees have been increased from Rs8cr to Rs 36 cr and above 1,000 sq mt it has raised from Rs 8.5 cr to Rs 40 cr.

The annual recurring fees for offshore casinos for vessels up to 200 passenger capacity have gone up from Rs 10 cr to Rs 25 cr. For the vessels above 200 and upto 400 passenger capacity the charges have been increased from Rs11cr to Rs30cr and above 400 passenger capacity of vessels the fees have seen a hike from Rs 12 cr to Rs 40 cr.

The government has also increased fees for transfer of license for onshore casinos from Rs 10 cr to Rs 30 cr and from Rs 20 cr to Rs 50 cr for offshore casinos.

Delta has the first-mover advantage in the casino segment in India and has operational casinos in Goa and Sikkim. As per Q3FY18, company derives 75% of consolidated revenues from casino gaming, 14% from online gaming and 11% from hospitality division.

Delta Corp Ltd ended at Rs250.35 down by Rs47.9 or 16.06% from its previous closing of Rs298.25 on the BSE. The stock traded below its 50 DMA.

Savio Rodrigues

Savio Rodrigues Founder & Editor-in-Chief GoaChronicle.com

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