Shares of Delta Corp and Nazara Technologies experienced a significant decline following the GST Council's decision to approve a 40% tax on casinos, betting, and online money games. The move has sent shockwaves through the gaming industry, impacting stock prices and future business plans.

Market Reaction

Delta Corp, a major player in the gaming and hospitality sector, saw its shares plummet by 7.2% to Rs 88.35. Meanwhile, Nazara Technologies, a leading gaming and sports media company, experienced a more modest drop of 1.6%.

New Tax Structure

The GST Council has introduced a revised tax structure, simplifying the current four-rate system to two primary slabs:

• 5% slab
• 18% slab

However, a new 40% rate has been added for luxury and demerit goods, which now includes gaming activities. This significant tax hike is set to take effect from September 22, potentially reshaping the landscape of the gaming industry in India.

Impact on Delta Corp's Business Plans

The uncertainty surrounding the GST framework has already had tangible effects on Delta Corp's business strategies. The company recently announced the shelving of its plans for a Rs 2,000-2,500 crore integrated resort project in Goa, citing the unclear GST situation as the primary reason.

Delta Corp's Recent Financial Performance

Despite the challenging regulatory environment, Delta Corp reported a mixed financial performance in its most recent quarter:

While the company saw a substantial increase in net profit, the decline in EBITDA suggests potential pressures on operational efficiency.

Industry Implications

The implementation of the 40% tax rate on gaming activities is likely to have far-reaching consequences for the entire gaming and casino industry in India. Companies may need to reassess their business models, pricing strategies, and expansion plans in light of this new tax burden.

As the September 22 implementation date approaches, investors and industry stakeholders will be closely watching for any further developments or potential mitigating measures from the affected companies.

Delta Corp , a major player in the Indian gaming industry, has seen its shares tumble by 9% over the past three trading sessions following the announcement of a ban on real money gaming (RMG). The stock's decline reflects growing concerns about the company's future prospects in light of regulatory changes in the online gaming sector.

Stock Performance

The company's stock is currently trading below its key technical indicators, with prices falling under both the 50-day moving average of Rs 88.00 and the 200-day moving average of Rs 97.00. This downward trend is part of a larger pattern, as Delta Corp's shares have depreciated by 34% over the past year.

Regulatory Headwinds

The primary catalyst for the recent stock decline is the introduction of the Promotion and Regulation of Online Gaming Bill, 2025. This legislation aims to ban online money gaming, which directly impacts popular games like rummy and poker. The implications for Delta Corp are significant, given that 94% of the company's revenue is derived from gaming operations.

Financial Impact

Delta Corp's reliance on gaming operations is evident in its recent quarterly results. Out of total net sales of Rs 184.00 crore, the company earned Rs 173.00 crore from gaming operations alone. This heavy dependence on the gaming sector makes Delta Corp particularly vulnerable to regulatory changes affecting the industry.

Technical Analysis

Market analysts are closely watching the stock's movements. Technical analysts suggest that Delta Corp shares may consolidate within the range of Rs 82.80 to Rs 96.20. They have identified a strong support level at Rs 81.00, which could be a critical price point for investors to monitor.

Industry Outlook

The ban on real money gaming and the potential introduction of a sin tax are viewed as significant setbacks for the online gaming industry in India. With the country's online gaming market valued at USD 4.00 billion, these regulatory changes are expected to have far-reaching consequences for companies operating in this space.

Conclusion

As Delta Corp navigates these challenging regulatory waters, investors and industry observers will be keenly watching how the company adapts its business model to the changing landscape. The coming months will be crucial in determining the long-term impact of these regulatory changes on Delta Corp and the broader online gaming industry in India.