Indian casino and online gaming operator Delta Corp recently reported its financial performance for the fourth quarter of 2023. Despite facing a 15.6% YoY decrease in gross income, the company showed resilience in its online skill games and hospitality segments. Additionally, Delta Corp addressed legal challenges, emphasizing its position in contesting substantial Goods and Services Tax (GST) demands.
Financial Performance:
In the three months ending December 31, 2023, Delta Corp witnessed a 15.6% YoY drop in gross income, totaling Rs 234.41 crores (US$28.2 million). This decline was primarily attributed to a decrease in the casino gaming segment, with income from gaming operations falling to Rs 181.54 crores (US$21.9 million), down 14.8% sequentially.
However, the company showcased promising results in other sectors, reporting an 8.3% QoQ increase in income from online skill games, reaching Rs 39.13 crores (US$4.7 million). The hospitality segment also experienced significant growth, with a 59.8% rise to Rs 13.74 crores (US$1.66 million).
Despite these positive aspects, Delta Corp’s profit for the period saw a 50.3% sequential decline to Rs 34.48 crores (US$4.2 million), primarily attributed to the downturn in gaming income.
Legal Challenges and GST Controversy:
Delta Corp addressed a noteworthy legal challenge, clarifying its decision not to incorporate any provision for impairment in its financials related to GST demands. Three subsidiaries faced notices demanding back payment of Rs 11,439.49 crores (US$1.38 billion) for alleged short payment of GST.
Delta Corp asserted its subsidiaries’ strong grounds for defense against the show cause notices, indicating ongoing legal battles. The company highlighted that industry participants have collectively represented concerns to the government regarding the calculation of GST based on the gross bet value.
The company, along with its subsidiaries, has filed writ petitions and obtained Stay orders from respective High Courts. Delta Corp emphasized its belief in the arbitrary nature of these tax demands, asserting their contradiction to legal provisions. The subsidiaries are committed to utilizing all available legal remedies to challenge these demands and associated proceedings.
Despite facing challenges in its casino gaming segment, Delta Corp’s diversified portfolio demonstrated resilience with notable growth in online skill games and hospitality. The legal disputes surrounding GST demands underscore the broader industry issue, prompting the company and its subsidiaries to actively pursue legal remedies.
As Delta Corp navigates these challenges, its financial performance and strategic decisions will be closely monitored by stakeholders and industry observers. The company’s commitment to defending against tax demands reflects its proactive stance in safeguarding its financial interests and maintaining industry integrity.