Delta Corp denies getting casino licence in Daman, stock crashes 4%

The share price of casino operator and hospitality group Delta Corp plunged over 4.6 percent on September 19 after the company denied reports of receiving a casino licence in Daman. The scrip closed Rs 10, or  4.7 percent, lower at Rs 215 on the National Stock Exchange (NSE).

In an exchange filing on September 16, the company said “We have been made aware that there are various online articles and social media posts claiming that the UT administration of Daman and Diu has granted casino licenses inter alia to Deltin Hotel, Daman.

“Please note that neither the company nor its subsidiaries has received any communication regarding grant of any such license and we cannot verify the authenticity of such claims.”

Last week, some tweets suggested that the company got licence only for slot machines in Daman and not the whole casino. It was also said The Deltin, Daman, was to pay a permission fee for 60 months along with a security deposit of Rs 10 lakh within 30 days.

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Delta Corp filed a writ petition with the Bombay High Court in December 2018 in the hope of receiving a casino licence in the union territory. The move came four years after the company opened its five-star resort The Deltin in Daman through subsidiary Daman Hospitality Private Limited,  with plans to launch casino operations.

Looks like the wait will be longer and it is also hurting Delta Corp’s kitty.

During Q1FY23 earnings concall, Hardik Dhebar, Chief Financial Officer said, “We all know the Daman matter is now being heard on a regular basis in the Mumbai High Court. About three to four hearings have already happened where Delta concluded arguments and now we are waiting for the administration of Daman to commence and complete their argument. These legal expenses are an area where there has been a little bit of cost.”

The company posted a healthy set of numbers in Q1FY23 with revenue growing 14.6 percent QoQ to Rs 250.3 crore. On a YoY basis, revenues were up 230 percent due to lower base effect. Profit after tax grew 18.6 percent QoQ to Rs 57.5 crore.

The company operates three offshore casinos, two land-based casinos and a 5-star hotel in Goa and two land-based casinos in Sikkim and Nepal each.