Goa boat casinos to dry land game changer: analyst

Aug 06, 2018 Newsdesk Latest News, Rest of Asia, Top of the deck  

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An announcement by the chief minister of the Indian state of Goa that existing boat-based casinos (pictured) must switch to land operations within four years and that formal regulations relating to casino business will be published by the end of August, has been described by a brokerage as “transformational” for Delta Corp Ltd, currently one of the Goa operators.

Union Gaming Securities Asia Ltd, which covers Delta Corp, said that experience from the United States showed that in the year 2000 – the first full year of operations after an Illinois river boat casino licence had been converted to a land-based one – there had been a near 25-percent rise in gross gaming revenue (GGR).

Goa has over the years allowed some small-scale electronic gaming halls in upmarket hotels on land.

Union Gaming estimated Goa’s annual GGR at circa US$200 million, but added that the “true potential” of the state – and of India as a whole – could not be realised without “quality supply” in terms of venues. The brokerage has a bullish view on the future of gaming in Goa and earlier this year suggested the size of the industry could top US$1 billion in GGR within a few years.

A 2016 report from Global Market Advisors LLC forecast the Indian casino market could be worth US$10 billion per year with the “right product” in terms of facilities.

Union Gaming analyst Grant Govertsen said in a Monday note: “We believe the introduction of high-quality integrated resort (IR) supply will firmly put India on the gaming map and (eventually) become one of the crown jewels of Asia.”

He added: “Importantly, the government intends to issue IR licences only to those holding existing offshore licences. Delta holds three of these licences, while two are owned by another company, and a sixth has never launched operations…”

“In terms of developing its first IR, not only has Delta purchased a large site near the already-under-construction new airport, they’re also well under way in terms of master-planning the site with a world-renown gaming architect,” Mr Govertsen further stated.

Delta Corp reported a fortnight ago an unaudited net profit from operations of INR416.6 million (US$6.05 million) on revenue of INR1.96 billion for its financial second quarter ended June 30, having made a net profit from operations of INR216.4 million on revenue of INR1.32 billion a year earlier.

The company, India’s only listed gaming firm, currently operates casinos in the Indian states of Goa and Sikkim.

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