India’s largest and only publicly traded gaming and hospitality company Delta Corp. advanced by as much as 3 percent during Tuesday’s early trading hours following news that it had secured a license to operate a casino in the state of Sikkim.
Delta Corp. informed bourses last Monday that it had finally been issued license to operate a casino under the Sikkim (Control & Tax) Act, 2002. The announcement came several weeks after the company announced the launch of its Casino Deltin Denzong in the state’s Gangtok area.
“The company is fully ready to commence its casino operations and will do so immediately,” Delta Corp. said in a statement.
The news caused shares of Delta Corp to jump in trade on the Bombay Stock Exchange. The shares were trading at INR137.15 (USD2.02), up 1.75% around noon Tuesday.
The celebration, however, didn’t last long. A day later, Delta Corp. released its third quarter earnings, which disappointed analysts as the gaming company’s consolidated net profit dropped 68.8 percent to INR 10 crore (USD1.47 million) “on lower casino business,” although the company’s year-on-year growth was 37.2 percent in bottomline.
Delta Corp’s EBITDA dropped 44.8 percent sequentially and 3.5 percent year-on-year to INR31.3 crore (USD4.61 million). Income from the company’s operations fell 22.9 percent quarter-on-quarter to INR103.6 crore (USD15.30 million) as casino gaming division, which contributed 87 percent to total business, reported a 27 percent drop at INR90.35 crore (USD133 million) compared with previous quarter, but the company’s hospitality business grew by 15.9 percent quarter-on-quarter and 7.7 percent year-on-year to INR 18.19 crore (USD2.68 million) in the quarter ended December 2016.
But the Sikkim venture may just prove to be a boon for the hospitality company. In April, Delta Corp announced that it has partnered with Hotel WelcomHeritage Denzong Regency, which will lease the gaming space to Delta Corp. The gaming company, in turn, will be “responsible for the day-to-day operations and management of the new casino.” Three months later, Delta Corp. received Sikkim’s elusive approval—in the form of a provisional license—to expand into the state.
Delta Corp’s new casino will join Sikkim’s two other existing casinos—Casino Mahjong in the Mayfair resort and Casino Sikkim in Hotel Royal Plaza.
Aside from the Gangtok casino, Delta Corp also operates three offshore and one onshore casino in Goa. The company announced in June that the government of Goa has authorized its wholly owned subsidiary Delta Pleasure Cruise Company to operate MV Royale Flotel—Deltin Caravela on Mandovi River.