MUMBAI: Shares of Delta Corp slumped 23% to Rs 190 today against the previous close of Rs 246.80 on BSE. It opened lower at Rs 222.15 on BSE.
Shares of Delta Corp Ltd crashed after the GST Council decided to levy a 28 per cent GST on online gaming, horse racing, and casinos. The decision to raise GST by 10% online gaming is negative for the investors of the online gaming firm. Currently, online gaming platforms pay 18 percent GST on the platform fees.
Delta Corp is engaged in the operation of casino. Its segments include real estate, gaming, hospitality and others. The company operates its gaming and hospitality businesses under the DELTIN brand. The company owns three casinos in Goa, including Deltin Royale, Deltin JAQK and Deltin Caravela.
“Online gaming, horse racing and casinos will be taxed at 28% (all three activities) and they will be taxed on full face value,” said Union Finance Minister Nirmala Sitharaman had announced yesterday.
Delta Corp reported a 6% rise in net profit to Rs 51 crore for the quarter ended March 2023 against Rs 48 crore in the corresponding period last year. Revenue from operations rose 4% to Rs 227 crore in the March 2023 quarter against Rs 218 crore in the corresponding quarter of last year. Revenues fell 17% quarter-on-quarter, compared with Rs 273 crore in the third quarter.
Meanwhile the gaming and esports industry professionals expressed their unhappiness over the decision saying that it would drastically impact the growth of the industry.
Sagar Nair, Co-founder, and CEO of Qlan, the Gamers’ Social Network said: “The decision of the GST council to impose a 28% tax will have a significant impact on the online gaming industry, which unfortunately includes the Esports community. While we understand that the government needs to impose such measures on casinos, horse racing, and gambling, the higher tax rate is not justified for the competitive gaming community. It can discourage new players from entering the market as their hard-earned earnings generated through their efforts just like mainstream athletes will be taxed on the same level as those involved in gambling and other such practices. For the Esports industry to continue its unprecedented growth and recognition on the international stage, it is vital for the government to treat Esports as a separate category with reasonable tax rates that would support the development of the sector.”
Rohit Agarwal, Founder & Director, Alpha Zegus, the next-gen marketing agency specializing in the domains of gaming & lifestyle: “Yet again, esports being included in the same domain as online gaming, horse racing, and casino, has put our industry at a major disadvantage. While the government might have fair reasons to impose higher GST on horse racing and casino winnings, imposing the same rules on an industry like esports doesn’t seem fair. Esports does not only have a ‘win or lose’ situation basis luck but has a very big element of skill that determines the outcome of the game. This is not what I expected, and our fight to separate esports from other labels still continues.”
The management of Kick Games Studios Pvt Ltd said in a statement: “The GST Council’s decision to levy a 28% GST on online games without distinguishing between games of skill and chance poses a severe threat to the growth and sustainability of the online gaming industry in India. These regressive measures disregards years of established legal precedents and unjustly associates online gaming with gambling activities and will have a negative impact on the growth of the real-money gaming segment, which accounted for 77% of India’s gaming sector revenues in 2022.”
