India’s only publicly listed company in the casino gaming industry, Delta, had an impressive run in the last quarter of 2017.


-Delta poised to emerge from Goa license fee debate ‘in better shape’-

India’s only publicly listed company in the casino gaming industry, Delta, had an impressive run in the last quarter of 2017. Its revenue climbed by 11%, while its EBITDA (earnings before interest, taxes, depreciation and amortization) rose a modest 5%. Net revenue year on year was up by 64% and its EBITDA ticked up 6%.

As reported by Union Gaming Asia, Delta’s casino operations, which are composed of Goa riverboat casinos, contributed the most to the increase in revenue. Online gaming and hospitality ventures assisted, but not to the levels of the riverboats.

Due to a strict political environment in the country, India’s gaming industry is much smaller than what is found in other countries. However, it’s a growing market that is expected to see rapid growth in the near term. Already in the first quarter of 2018, the industry as a whole saw an increase in revenue of 73%.

Although it has experienced growth in the past year, Delta is limited from large-scale expansion due to the riverboats. The confined spaces don’t allow for additional offerings, and Delta will need to move onshore if it wants to continue growing, according to Union Gaming analyst Grant Govertsen. Nonetheless, Delta’s casino revenue growth is expected to grow by 29% in the next fiscal year (FY) and 22% in FY2020. Delta could launch land-based casinos as early as FY2022 once integrated resorts begin to be offered in the country.

After Delta acquired one of India’s premier online gaming operators last year, revenue for online gaming, comprised almost exclusively of poker, grew 18% across the final

three quarters of the fiscal year. The hospitality segment saw an increase of 20% year on year, fueled primarily to increased tourism to the country and, in particular, Goa.

Delta shares took a hit following the announcement by the Goa government that it planned on quadrupling the licensing fees for casinos in the area. The entire casino industry is now working together to try to force either a complete or a partial rollback. That struggle is still ongoing, with no substantiating information for or against the move.

Union Gaming expects Delta to “come out on the other side in better shape” whether or not the fee increase goes forward, and based its analysis on the fees being intact. The company feels that, should the fees remain, Delta competitors will have to exit the game, and Delta will stay ahead. If the fees are reduced, Delta obviously wins.

“We continue to view Delta as a transformational story with the eventual move to land-based casinos in Goa, in addition to the go-ahead for casino gaming at its existing resort in Daman,” Govertsen said in a note.