Leading Indian gaming operator Delta Corp has recorded a slight 3% fall in income for the three months to 30 June 2019. But the decline is far from an accurate reflection of the company’s performance with the temporary absence of one of Delta’s three offshore casinos and an “absurd tax evasion allegation” having negatively impacted results, according to Union Gaming analyst Grant Govertsen.
Delta reported income of 194.72 crore in 2Q19, down from 195.51 crore in the same period last year and from 213.53 crore in the first quarter. The results included a 2.6% increase in income from gaming operations to 181.37 crore, offset by reductions in both online skill gaming operations and hospitality operations.
However, Govertsen said that Delta Corp would have booked a double digit increase in its key gaming operations segment if not for one of its three offshore casinos being grounded for much of the quarter and evening alcohol sales being banned during the recent elections.
He also noted a 30% decline in Delta shares since early May, due in part to “an absurd tax evasion allegation that Delta owes GST on wagers rather than revenue.”
Govertsen added, “We expect a near-term clarification on the taxation situation, which should find that taxes should be levied on revenue, not wagering (in line with international standards).”
Union Gaming has maintained a Buy rating on Delta Corp shares on the back of numerous positive catalysts which also include the impending move of all Goan offshore casinos to land.
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