India’s only publicly traded casino operator Delta Corp is trying to refute rumors that caused its stock price to lose one-sixth of its value.
Over the course of three trading sessions, Delta Corp’s shares lost 17% of their value, from a 52-week-high of Rs 218 (US $3.37) to just Rs 179 on Monday. The stock has since enjoyed a slight bargain-hunter bounce, rising 1.5% on Tuesday.
Delta’s downward trajectory was sparked by rumors that the Indian coastal Union Territory of Daman and Diu was considering a ‘merger’ with the state of Gujarat. Word had it that Prime Minister Narendra Modi would consider the merger of the geographical regions during his visit to Diu next week.
The merger would prove problematic, given that Delta operates a Deltin-branded hotel in Daman, to which it has been promising to add a casino floor for some time now. Daman is one of only three Indian jurisdictions – along with Goa and Sikkim – to have approved casino operations within their borders, meaning the activity remains illegal in Gujarat (which also bans alcohol sales, a potential further threat to the Deltin’s tourist appeal).
More level-headed analysts have dismissed the merger talk as lacking any basis in reality, but a Mumbai broker’s publicly expressed concerns were enough to convince Delta shareholders to stampede for the exits. The company hopes market sanity will be restored following Modi’s visit.
Delta’s Daman hotel launched in 2014 but the company is still waiting on regulatory approval to formally launch the venue’s gaming operations. Delta has promised that the Daman casino will feature 1,200 gaming positions, adding to the 1,700 positions that Delta currently holds in the state of Goa (three floating casinos and one on-shore casino). Delta also recently received regulatory approval to launch casino operations in Sikkim.
Delta branched out into the online gambling sector last year via its acquisition of a stake in Gaussian Networks, the parent company of online poker business Adda52. Gaussian shareholders overwhelmingly approved the deal last month.
