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Business Gaming

Gaming industry badly hit as demonetisation paralyses business, move may benefit legitimate operators in the long run

Prime Minister Narendra Modi’s sudden and drastic announcement demonetising (except for emergency services) all 500 & 1000 rupee notes , i.e. around 85% of the currency in circulation, from 9th November onwards, created chaos and panic amongst traders, business houses and most citizens.  However, cash-intensive sectors like real estate, hospitality, luxury goods and gambling seem to be the worst hit.

As per news reports, post demonetisation there have hardly been any customers in casinos in Goa, Sikkim or Nepal. “All our businesses have closed-down. We have no money (in cash) to pay people and vice versa,” the owner of a popular offshore casino is quoted to have told the Indian Express. The stock price of Delta Corp, India’s largest and only listed casino company has fallen almost 35% after the demonetisation announcement, indicating the heavy drop in revenues for the casino business.

Some other reports indicate that not just casinos but other forms of gambling like the illegal betting and matka industries have been heavily affected. “Ours is a cash-based business and the government’s decision has hit us hard. There are millions of rupees in circulation,” a Delhi-based bookie is quoted to have told Hindustan Times.

Apart from this, race-courses, where betting is legally permitted have also been affected since there is not enough liquidity for punters to place bets. The Madras, Delhi, Bangalore and Kolkata race-courses have so far cancelled their scheduled races.  Similarly, the sale of legal lotteries is also said to be impacted due to the demonetisation of the high-value currency notes.

Business of online skill gaming companies (poker, rummy, fantasy game, social gaming etc.)  however does not seem to have been as severely affected as those not having liquid cash are preferring to play games online using credit cards, debit cards and other banking channels or e-wallets.

While the unexpected move is expected to impact all gaming related businesses this financial year, it is expected that those operators offering services legally would not be impacted in the long run. However, the illegal betting, gambling parlours and matka business, said to be operated by the underworld and with gangsters having links to terrorist organisations will be severely affected as the sources of black money will be curtailed, at least in the short run.

The move will however not affect legal gaming and casino businesses beyond this financial year as currency flows are expected to return to normalcy in a month or two. In the foreseeable future, even legal gaming ventures will have to reduce reliance on cash receipts and move to plastic money or banking transactions. The demonetisation exercise should therefore be a blessing in disguise for the gaming industry and should be used as an opportunity to usher highest standards of transparency and tax compliance in the legal gaming industry, which is perceived (and sometimes unfairly so) to be a haven of black money.

Categories
Legal & Regulatory

AIGF announces study tour and panel discussion in Sikkim on 19th November

The All India Gaming Federation (AIGF) has announced a one-day study tour and panel discussion in Gangtok, Sikkim for its members and for delegates from India and abroad. The one-day event includes a visit to the Golden Gaming betting and online gambling arena, Delta Corp’s new casino and an interactive discussion. Former CBI Director Ranjit Sinha and a senior Sikkim government official are also expected to speak at the event.

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The AIGF concept note for the event reads as follows:

Sikkim, one of the most peaceful and well-developed state in the country is also one which has the most liberal laws for the gaming and betting industry. The state of Sikkim allows almost all forms of gambling and betting activities: the government operates online lotteries which are marketed and sold in various other states, it also permits games of skill, online gaming and betting as well as land-based casinos in five-star hotels.

Gaming, betting and lotteries contributes heavily to the development of the hilly and mountainous state of Sikkim, which otherwise is not blessed with a geographical terrain suitable for agricultural and manufacturing activities. Despite this, there has not been any serious attempt to understand the regulatory framework governing gaming, casinos and betting in the state, the benefits accruing to the state in terms of revenues and employment generation due to the gaming industry as well as how the model implemented by the Sikkim government can be emulated by other states.

In light of the above, the All India Gaming Federation (AIGF), an apex not-for-profit body to create awareness about the gaming industry has decided to organise a one-day study tour, panel discussion and consultation session in the state of Sikkim to have a robust discussion on the model created by the Sikkim government, International best practices and how other governments can learn from this unique policy framework.

For further details, readers may contact [email protected]

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Business

Gopal Kanda promoted defunct offshore casino to start operations soon, talks on with Essel Group

The Goa government seems to have decided to revive a license issued for a sixth offshore casino in the state, since gaming company GoldenGlobe Hotels Private Limited (GGHPL) has paid pending annual recurring license fees and others levies to the state government amounting to over Rs. 46 crores.

GGHPL is a company promoted by Haryana strongman and former minister Gopal Kanda, who was arrested a few years ago on charges of abetting the suicide of an air hostess. GGHPL used to operate Casino Rio on the Mandovi River until 2011, but could not continue operations due to financial trouble faced by the company and criminal investigation on its promoter. In 2013, the casino ship of GGHPL was towed away by the Goa ports department for failing to pay fees and taxes.

Recently however, GGHPL approached the Goa bench of the Bombay High Court to revive and renew the license after the state government asked the company to pay pending dues and taxes along with interest and penalty. The state government also informed the High Court that it was willing to favourably consider renewal of GGHPL’s license if it paid pending dues amounting to almost Rs. 50 crores.

Now that GGHPL has paid its pending dues, the state government has asked the company to obtain permissions for the renewal of the licence, which includes permissions from the state pollution control board, Captain of Ports (CoP), etc. before taking a final decision on the matter, as per news reports.

Sources familiar with the matter however indicate that talks are on to sell stake in GGHPL to the Essel Group, which will give the later an opportunity to operate an offshore casino in Goa. Essel Group has been trying to start an offshore by the name of ‘Casino Maharaja’ in Goa since 2009, but has not managed to get a license from the state government.

Essel Group however already has an equipped casino vessel moored and ready in Goan waters and all it needs is a license to commence operations. Since Essel Group already has the necessary infrastructure and expertise to start casino operations,  collaborating with Kanda’s company or acquiring it would be seen to be the best option to finally kick-start the long-pending Casino Maharaja project, since the Goa government through a cabinet decision has announced a cap on the number of offshore casino licenses and has resolved not to issue any new licenses.

It may be noted that Essel Group is already involved in the gaming business and  distributes a few state government under the brand name ‘Playwin’. It has recently also started pokernation.com an online poker website.

Interestingly, Essel Group Promoter and Chairman Dr. Subhash Chandra was recently elected to the Rajya Sabha from Haryana as an independent candidate with support from the ruling Bharatiya Janata Party (BJP). Chandra’s newfound connection may help him in striking a deal with fellow Haryana politician Gopal Kanda.

Categories
Legal & Regulatory

PIL filed in High Court against Goa offshore casinos

Kashinath Shetye, a self-styled social activist has filed a Public Interest Litigation (PIL) in the Goa bench of the Bombay High Court asking for closure of offshore casinos in the state and stating that the state government has violated two central laws, the Offshore Areas Mineral (Development & Regulations) Act, 2002 and the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976.

Shetye in his petition has impleaded  group and subsidiary companies of Delta Corp and Pride Group, which operate the five offshore casinos, as well as the Chief Secretary, Under Secretary Home, Captain of Ports, Director of Fisheries, Ministry of Environment and Forests, Marine Police, Department of Tourism, GCZMA, GSPCB, Collector and Deputy Collector.

As per the petition, offshore casinos violate Section 3(2) of the Offshore Areas Act read with Section 2(n) of the Offshore Areas Mineral Act defines offshore area to mean territory beyond twelve nautical miles from the baseline. Further, Shetye has contended that as per the two central laws, the casinos have to be shifted outside the territorial waters of Goa, i.e. outside twelve nautical miles from the coastline.

He has also contended that the casino vessels have been anchored in Coastal Regulation Zones (CRZ) as well as No Development Zones (NDZ) and are violating several environmental laws and regulations.

The High Court while admitting the PIL has listed the matter for hearing on 4th October while also appointing a lawyer as an amicus curiae to assist Shetye and the court.

It appears though that both of Shetye’s contentions are frivolous and are unlikely to be accepted.  A National Green Tribunal (NGT) bench in Pune has already examined the issue of pollution and violation of environmental norms by offshore casinos in the past.

Additionally, as per Section 13A of the Goa, Daman and Diu Public Gambling Act, the state government is entitled to permit live gaming on offshore vessels as may be notified.  Since gambling and betting is a state subject, it is unlikely that the words offshore vessels have to be necessarily interpreted in  the light of central legislation pertaining to offshore mining and shipping.

However, since this PIL comes close to to elections in Goa, where the ruling Bharatiya Janata Party (BJP) has already faced considerable flak and political heat over its alleged flip-flops on the casino issue, the government’s response and High Court’s order will be closely monitored.

Categories
Business

Breaking news: Delta Corp set to acquire Ace2three for around $100 million as per news reports

Just weeks after the announcement of its plan to fully acquire leading poker website Adda52, Delta Corp is in advanced stages of discussions with Head Infotech Pvt. Ltd., which operates Ace2three.com, the leading online rummy website in India.

As per a series of tweets on the ET Now Twitter page yesterday, Delta Corp seems to be in discussions to buy out Ace2three.  More contours of the purported deal have emerged today, with news channel ET Now suggesting that Delta Corp may acquire Ace2Three for around US$80-100 million (around Rs. 528-660 crores), which is likely to be a stock and cash deal. The announcement may be made by mid-October as per the report. Head Infotech’s EBIDTA for the previous year was around Rs. 100 crores, while its turnover is in the range of Rs. 200 crores. Ace2Three is said to have around seven million users on its rummy platform.

If the deal goes through, it will make Delta Corp the number one player in the online skill games space as it will assume leadership position for both, rummy and poker games. Over the past few months, Delta Corp has tried to consolidate its position as a market leader in the gaming and casino space and the recent deals show that it is aggressively trying to entire the online gaming space as well.

Delta Corp has recently restarted operations in its third offshore casino, Deltin Caravela and also announced a new casino that is to be launched in Hotel Denzong Regency in Gangtok. It is believed that the casino operations in Hotel Denzong Regency will commence before Diwali, although the company has not yet announced an official date for the launch.

Categories
Business

Goa govt notifies onshore casino license fee hike, CM not averse to sixth offshore casino

The Goa government has notified revised license fees for onshore casinos to implement the hike in fees that were announced in the budget earlier this year. As per the notification, a casino having space upto 100 square metres will have to pay an annual license fee of Rs. 3.50 crores, while a casino having space between 500-750 square metres will have to pay annual fees to the tune of Rs. 6.50 crores.

Additionally, the government has introduced two new categories casinos, wherein casinos with gaming space of over 750 square metres will have to pay higher recurring fees. Casinos having space between 750-1,000 square metres have to pay license fees to the tune of Rs. 8 crores per annum, while those having floor space of over 1,000 square metres will have to pay fees of Rs. 8.50 crores per annum. As per earlier provisions of the budget, these casinos would have had to pay Rs. 6.50 crores annually.

The avowed purpose of this notification is to increase revenues to the exchequer and reduce the number of casinos to single digits as per government sources.

In other related developments, the Goa government has renewed the offshore casino license of Deltin Caravela, taking the number of active offshore casinos to five. Additionally, the government has indicated to the Bombay High Court (Goa bench) that it is not averse to renewing the license  M/s Golden Globe Hotels Pvt Ltd provided that it pays recurring fees and penalties totalling to almost Rs. 50 crores. The aforementioned casino linked to former Haryana Minister Gopal Kanda, was not operational due to financial crises and internal problems faced by the company.

The Goa government has faced massive resistance from civil society groups and political parties against the decision to revive the two offshore casinos. However, Chief Minister Laxmikant Parsekar has steadfastly maintained that no new offshore casinos will be permitted and that the two casino licenses would be renewed only on technical grounds.

If the Goa government agrees to renew the license of Golden Globe Hotels, the total number of offshore casinos in the state will rise to six.

Categories
Business Gaming

Silver Heritage Group set to launch new casino resort on Indo-Nepal border, files for IPO in Australia

Hong Kong based casino operator Silver Heritage Group is set to offer its shares to the public through the Australian bourses, as per the company press release and news reports.The company plans to raise Australian Australian $25 million through the listing on the Australian market and hopes to complete the process by next month, primarily to fund the Tiger Palace Resort on the India-Nepal Border.

The Group hopes to offer 62.5 million ordinary shares at 40 cents per-share and the indicative market capitalisation of the company post-listing is expected to be around Australian $80m.

The company noted,  “Funds will primarily be used for development of Tiger Palace Resort, the first integrated resort built for Indian casino players located in Nepal close to the Indian border,” said a press release issued on Wednesday on behalf of the company. It added Tiger Palace (pictured in an artist’s rendering) would be launched in ‘early 2017’.”

Since entry of foreign players in the Indian casino sector is not permitted, the Silver Heritage Group is planning a casino on the Nepalese side of the border, close to the India and is primarily intended to cater to Indians.

Silver Heritage Group also has presence in other Asian countries like Vietnam, Laos and Cambodia. In the company press release, Mike Bosver, the CEO of the Group said, “We focus on mid-size opportunities and improving operating performance to best practice standards. This strategy has allowed us to build significant expertise and local knowledge while growing profitability and generating attractive returns on capital.”

Tiger Palace resort is slated to be operational from early 2017 as per the Silver Heritage website. The funding for the project is likely to ensure that Tiger Palace resort competes with casinos in Goa, Sikkim and Sri Lanka to attract Indian gamers.

Categories
Gaming

Delta Corp secures provisional license for operating Sikkim casino, files regulatory update with stock exchanges

Delta Corp, India’s largest and only listed gaming company in an announcement to the stock exchanges claimed that it had secured a provisional license to operate a casino at Hotel Denzong Regency in Gangtok under the Sikkim Casinos (Control & Tax) Act, 2002. The regulatory filing also noted that Delta Corp had entered into a leave and license agreement with Hotel Denzong Regency and it is in the process of refurbishing the casino premises to make it ready.

The company also noted that it expects the casino to be ready in the next two or three months and will offer approximately 150 gaming positions in the new casino.  Glaws was the first website to exclusively break the news three months ago about Delta Corp’s plans to operate a casino in Hotel Denzong Regency.

Two other casinos, i.e. one at Hotel Mayfair and another at Hotel Royal Plaza are currently operational in Sikkim. Delta Corp’s announcement will make it the third casino in Sikkim and cater to players from Kolkata, Siliguri and other major cities in West Bengal and Assam.

Following is the full text of the announcement by Delta Corp:

Delta Corp Ltd has informed BSE that the Company has signed a leave and license agreement for premises in the Denzong Regency Hotel, Gangtok, Sikkim, to operate a casino. Delta has also obtained a provisional license from the Government of Sikkim under the Sikkim Casino (Control & Tax) Act, 2002 for the same.

The Company is in the process of refurbishing and getting the premises ‘casino ready’ which should be completed in the next three months.

Delta, in pursuing its strategy of expanding its gaming imprint will now have a presence in Sikkim, operating a live gaming casino offering approximately 150 gaming positions, thereby catering to the Eastern region market.

Delta will thus, in addition to three offshore and one onshore casino in Goa, will strengthen its presence by adding this Casino in Sikkim, making it a dominant and formidable player in the Indian gaming and entertainment space.

Categories
Gaming

Goa CM reiterates support for casinos even as protests grow, private party offers alternate site for offshore casinos

Goa Chief Minister Laxmikant Parsekar came out in strong support of casinos in the state and reiterated that casinos are an integral part of the state’s economy.

The state’s economy is dependent on casinos. But at the same time it should not be misunderstood that I am supporting to increase the number of casinos in the state,”  Parsekar is quoted to have said as per the Press Trust of India (PTI).

Parsekar added that a large number of people were employed by the casinos and through ancillary industries. He also denied that the government has plans to shift offshore casino Deltin Caravela, anchored in river Mandovi near Dr Salim Ali Bird Sanctuary, on the outskirts of Panaji city.

Interestingly however, Forest Minister Rajendra Arlekar had on Friday said his department has asked the Captain of Ports Department to shift the offshore casino vessel as it is anchored near a bird sanctuary.

The license of Deltin Caravela was recently renewed by the Goa government, taking the number of operational offshore casinos in the state to five. In the past few days, a large number of activists and politicians have protested against the growing casino culture in the state. NGO Aam Aurat Aadmi Against Gambling (AAAAG) has been at the forefront of anti-casino protests.

In a related development, local business house Chowgule Group have offered a private location in the River Zuari near Chicalim, which is just three kilometres away from the Dabolim Airport and six kilometres from the Mormugao Harbour, reports regional news portal The Goan.

Chowgule Group in their proposal have added that the private space can accommodate at least 10-12 casinos. Parking space and feeder boats to take visitors to the casino vessels can be easily made available as per the letter. The proposal also adds that since the village road is blocked at the end at a distance of 400 metres from the location and consequently there would be no disturbance to the villagers, which is a major concern at the other alternative sites.

Officials of the home department along with officials of Captain of Ports inspected the site to check the feasibility. It is understood that the state government has not officially responded to the proposal yet, but has neither ruled out the offer from the private entrepreneurs.

Categories
Gaming

Puducherry government officials to visit Goa to study casinos, cabinet may give final nod soon

Just days after Puducherry Chief Minister V. Narayanasamy in an interview mooted the idea of permitting offshore casinos in the pristine Union Territory, Malladi Krishna Rao, the Health & Tourism Minister of the region confirmed the proposal and noted that the cabinet had already held initial discussions on the issue.

Speaking to The Hindu , Rao, noted: “The Cabinet has held discussions on the proposal to start off-shore casinos modelled on the ones in Goa. We are exploring the options to allow them in Puducherry, Karaikal, Mahe and Yanam. The casinos would be primarily aimed at domestic and international tourists visiting the Union Territory.” 

The Hindu report further indicates that a delegation led by Rao is likely to visit Goa soon to study the modus operandi of casinos there. A final plan is then likely to be submitted to the cabinet for approval and implementation.

The poor performance of the hospitality industry in Puducherry is the reason for the government’s reason for introducing the plan to open up gaming and casinos. Currently, the occupancy rate in hotels in the Union Territory is only around 32 per cent.

If the plan goes through, Puducherry will become the first region in Southern India to allow casinos. A significant number of residents in states like Tamil Nadu, Karnataka, Andhra Pradesh, Telangana and Kerala may start visiting Puducherry instead of Sri Lanka or Goa to gamble. Although things are moving fast in the region and implementation may be swift because of the relatively small size of the Union Territory and absence of a strong opposition, a final decision may still take a few months.