Currently, the casino and online gaming industry is paying 28% tax on GGR (gross gaming revenue) which is basically their commission or rake. In the latest GST council meeting they announced that this would be changed to 28% on face value (amount of chips purchased). So effectively, if you would have to pay Rs. 128 to get chips worth Rs. 100. This would be a drastic negative for the company and the entire industry. Casinos online and offline would become very unattractive and delta corp would not be worth a fraction of what it is today. Now many companies including fantasy players like dream11 have appealed to the government to re-think this decision as it would lead to lakhs of job losses. To this appeal, the Minister of State for Electronics and Information Technology Rajeev Chandrashekhar has said a couple of days back that the whole regulatory framework for the gaming industry in India is very nascent and keeping in mind the industry’s plea, his ministry will request the GST Council to re-consider it’s decision. If the GST Council does re-consider, then the current stock price of Rs. 190 is a very attractive entry point in my view, but if they do not change their stance then the future of the company as a viable business is in doubt and I would be a seller at any price. Would be very keen to hear what the company has to say on 25th in it’s analyst call.
| Subscribe To Our Free Newsletter |
