Delta Corp Considering Legal Action Against Goa Government’s Demand For Unpaid License Fee Arrears For the COVID-19 Pandemic Period

The BSE-listed hospitality and casino giant, Delta Corp, is preparing for a legal battle against the Goa government’s demand for unpaid license fees for the COVID-19 pandemic-affected periods from April to October 2020 and May to September 2021, when all the casinos in the coastal state were ordered shut.

Delta Corp did not reveal the total licensing fees sought but reported that such payment would not affect its finances as provisions had already been made in its book of accounts. The same was validated on the bourses, with the company stock price holding steady even after the news of the government`s outstanding licensee fee demand became public.

The company, in a statement, said, “As provisions were already made in the relevant accounts and financial statements for these payments, there is no impact on the profit and loss account or the financial position of the company or its subsidiaries.”

“Nevertheless, we will be pursuing our legal remedies against this order,” the statement read.

According to the information let out by Delta Corp, the government is demanding full payment of outstanding licensee fees for the shut-down periods, including the interest accrued.

India’s leading casino operator announced in October 2021 that it had set aside ₹26.67 Crores for the licensing fees for the year but had not paid the amount. All casino operators had approached the government to convince them to waive or provide a reduction on casino license fees for the COVID-19-affected period as they had incurred substantial losses during that time.

Like the other casino operators, Delta Corp reported a loss of ₹22.57 Crores for the September 2021 quarter, a ₹28.24 Crores loss in the June 2021 quarter, and ₹54.91 Crores in losses in the third quarter of 2020.

This news comes when the casino business is running at capacity in Goa. The only listed gaming and hospitality company in India, Delta Corp, clocked its highest revenue and profit for the half year that ended September 2022.

In an interview with CNBC-TV18, Chairman Jaydev Mody sounded upbeat on the company’s expected performance in the upcoming quarters, “we are on track to see a robust performance in H2FY23; expect to do better in the third and fourth quarter.”

He added that the company is looking to unlock more value by raising ₹550 Crores via the Deltatech gaming IPO. After the IPO, Mody will hold 70 to 75 percent of Deltatech Gaming, while the remainder will be publicly traded.

The casino issue is a hot political topic in Goa, and the government has been under pressure to find an alternate location to shift the offshore vessels from the Mandovi River for several years without any success.

Another hanging sword on the casino industry is the pending decision on the GST on casinos, online gaming, and horse racing, more clarity on which is expected to come in the upcoming 48th GST Council meeting on December 17.

In September, Delta Corp.’s share prices appreciated by almost 7% following a fake viral tweet that stated that the long-awaited casino license for the Deltin Hotel in Daman & Diu had been approved by the Union Territory (UT) Administration of Daman, Diu, and Dadra and Nagar Haveli (DNH). Sources in the Deltin Group said that the stock market analyst might have spread the fake news to gain a rally on the company’s stock.