Due to India's announcement of raising the Goods and Services Tax (GST) on the gambling industry from 28% to 40%, Delta Corp has decided to postpone its plans to invest in a new casino resort in Goa.
On September 3, the Indian GST Council approved a new tax framework, involving the highest tax rate for the gambling industry being raised to 40%, directly affecting the progress of Delta Corp's project. The company had originally planned to invest 200-250 billion rupees (approximately $284 million) in a new resort and casino development in Dabolim, Goa.
India currently only allows three states to operate legal casinos, which must be located in five-star hotels or on maritime vessels. Delta Corp's Chairman Jaydev Mody stated that the proposed 40% GST would make it difficult for the industry to survive. This policy was introduced at a time when India announced a complete ban on remote gaming, leading to massive layoffs in the industry.
After the announcement of the project's suspension, the company's stock price briefly rose by 12 rupees on the Mumbai Stock Exchange, but fell back by 7 rupees after Prime Minister Modi announced the tax reform agreement. According to the law, casinos are classified as "goods" and can be heavily taxed due to high social risks.
Delta Corp's profits fell by 82% quarter-on-quarter in the second quarter, and the company expressed concerns about tax uncertainty in its earnings report. Prime Minister Modi stated on social media that the tax reform aims to improve people's livelihoods and facilitate business operations. Delta Corp stated that it will proceed with the resort construction after the GST is clarified, and the project is expected to directly create about 10,000 job opportunities.
After the reform is approved, the market will closely watch Delta Corp's next move.
