by By the third quarter of FY25, Delta Corp, which is suffering from the 28% goods and services tax and saw a 59.34% decline in its consolidated revenue in the current fiscal year, hopes to be back to its previous levels of revenue and profitability.Anil Malani, CFO of Delta Corp., told Business Today that the company has also begun handing out one-time promotional chips to entice players back to its casinos following the new GST regime that went into effect in October 2023.
“We quickly realised that we will lose customers because there are several options available in the industry, and customers were not happy with the 28% levy. We therefore made a change of direction in December and determined that, regardless of the customer’s preferences, we ought to make an effort to partially offset the tax burden he is bearing,” Malani stated.
The company’s December top line reflected this shift in strategy as well. “We received as much as 55% of our revenue in October and November, and only 45% in December,” Malani stated, indicating that the decision we made in December to win back and keep our customers was well-received. Delta Corp. carried out the plan starting in January 2024, and foot traffic has since recovered to what it was before October 2023.
“You can play with them and cash in your winnings, but you can’t really go and encash them because they aren’t cash chips. We have been doing this intermittently for a number of years in a number of our locations, but it has now become standard procedure at our casinos, Malani said. The company will need to continue this, he added, since customers seem to value it more when it is done this way rather than having to pay 28% GST at the point of sale.He said, “It will affect our bottom line and our margins will decline by 6% to 8%.”
This quarter, one of the company’s vessels will go into dry dock and be decommissioned for four to six weeks for routine repair and maintenance, which will have an additional 10% to 12% impact on the company’s top line. It will take a quarter or two for our company to return to the profitability it was experiencing prior to the implementation of the revised GST tariffs. In all respects, April, May, and June are off season, a lean quarter, and not the best quarter of the year, according to Malani.
In reference to the GST notice, Malani stated that the business successfully contested the Show Cause notice in Goa for its casino, in Sikkim for its casino, and in West Bengal for its online gaming, winning a stay for each of the three. He emphasised that the business was fully compliant and stated, “It my understanding that most of these cases (relating to show cause notice for GST on online gaming) are going to be clubbed together, and now will be heard in the Supreme Court.”He declared, “We were always paying 28% GST on casinos and the process we used was the same as what we were doing before the GST era.”
