Another reprieve for Mandovi River casinos
Indian casino operators will petition a planned spike in gaming-related fees for offshore and onshore gaming halls, reports the Navhind Times. They say they will be forced to shut down operations if the increases go into effect.
An unnamed senior casino official of a told the Times the fees are insupportable. “The casinos are coming under 28 percent goods and service tax bracket. With the fee hike by almost 200 percent to 300 percent it would be difficult to run the business, as average annual turnover of the onshore casinos is between Rs35 crore (US$5.83 million) to 40 crore.”
According to another unidentified operator, “If the state government does not reduce the fees, there will be no option other than shutting down the casino business in the state, which could affect the livelihood of around 35,000 people who have been dependent directly and indirectly on the industry.”
Damodar Bhatkar, liaison officer of the Maharaja Casino, added, “The massive hike will drastically impact not only the casino business but also the tourism industry.”
Meanwhile, Goa’s fleet of floating casinos have received yet another six-month extension before they are required to move from their current location on the Mandovi River, according to local media reports. The latest extension runs until September.
News of the fee hikes sent shares in the biggest operator, Delta Corp, down by more than 16 percent in Bombay trading. Union Gaming analyst Grant Govertsen said the decline is a buying opportunity for the stock.
“The government, in its plans to move to land-based casinos, is ratcheting up the license fees now as a prelude to the law’s implementation to effectively put the existing land-based small-scale electronic casinos out of business and thus clean up the market in advance of true IRs,” he said in a note. The drop in the share price is “more than baking in the worst-case downside in terms of potential earnings impact and hence creating a buying opportunity.”
