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Delta Corp, India’s only listed gaming operator, has said the way the Supreme Court is calculating Goods and Services Tax for gaming operators is a favorable outcome. The company said the court’s approach supports the method it has already been using and could also apply retrospectively to earlier periods.
Company Sees Alignment With Its Method
In a 28 May release, Delta Corp said its understanding, based on limited information available on the Supreme Court’s pronouncement, is that the basis for computing revenue would not be the gross bet value of all games played during the relevant period. Instead, it said the calculation would be based on the amount received from players for the chips sold to them.
Delta Corp added that this is the method it adopted from October 2023 and that it would also be applicable retrospectively for the period between July 2017 and September 2023. The company described that interpretation as working in its favor.
Background To The Tax Dispute
The statement comes after India’s Supreme Court ruled in May that games of skill such as poker, fantasy sports, and rummy constitute gambling. The court also upheld the government’s position that taxes should be paid retrospectively, including before the GST framework was updated in 2023, and that they should be applied to the full face value of bets placed rather than gross gaming revenue.
Delta Corp had earlier received a notice in 2023 from the Directorate General of GST Intelligence in Hyderabad. The notice concerned an alleged shortfall in tax amounting to Rs11,400 crore, or US$1.34 billion, which the company said was roughly 3 times its total market cap at the time. It said that the figure was based on the estimated gross bet value of all games played at its casinos rather than on gross gaming revenue.
Projects And Operations
The company has already suspended construction of its US$285 million integrated resort project in Goa while it waits for greater clarity on GST. The project remains on hold until the company gets more certainty on the tax issue.
Delta Corp manages two largest offshore gambling facilities in India namely Deltin Royale and Deltin JAQK and one gambling facility is a floating hotel in King Casino located in Goa. In addition to this, Delta Corp also manages Deltin Suites in Goa, Casino Deltin Denzong in Sikkim, and the 176-room 5-star hotel, The Deltin in Daman. In FY23, the company also began operating Deltin Zuri, which it describes as the only luxurious land-based casino in South Goa.
Wider Significance
The company’s latest comments suggest the Supreme Court’s GST approach could ease some of the uncertainty surrounding its tax position, even as the broader legal and financial implications remain significant. For Delta Corp, the issue continues to be tied closely to both its existing operations and its delayed development plans.
Source: Inside Asian Gaming
