India’s leading casino operator Delta Corp managed to post double-digit profit growth despite stiff increases in fees and taxes on its Goa casino operations.
On Monday, the Bombay-listed Delta Corp reported fiscal Q2 net revenue of just over Rs2b (US$27.4m) in the three months ending September 30, a 39% improvement over the same period last year. Earnings were up 16.4% to Rs760m while net profit after taxes rose 11% year-on-year to Rs481m ($6.54m).
Delta operates four casinos in the state of Goa (three floating, one land-based), plus the Casino Deltin Denzong in the state of Sikkim, and an online ‘skill gaming’ segment that includes the country’s largest poker site, Adda52.com. Delta also operates an integrated resort in Daman that has yet to be granted a gaming license.
Delta’s casino gaming operations generated gross revenue of Rs2.03b, nearly 15% higher than the fiscal Q1 result. The rise is partially due to the disruption in the Goa casino market after the state government dramatically hiked gaming fees and taxes this April. Delta said its Goa fees and taxes would rise to Rs650m in the current fiscal year from Rs260m the previous year.
The increased cost of doing business led some operators to shut down temporarily this spring while at least two smaller operators chose to permanently shut their doors. Emkay Research analysts suggested that Delta’s Q2 results indicated that it was “gaining market share from smaller land-based casinos post-disruption.”
Delta’s online gambling operations remain something of an afterthought, generating revenue of only Rs351.6m in Q2, a 10% decline from Q1, although up 46% from the same period last year. The sequential decline was reportedly due to heavier marketing expenses.
Delta investors cheered the company’s report card, pushing the shares up 5.7% by the close of Tuesday’s trading.