Operator News

India – Moving Goa’s casinos onto land would make it a US$1bn market

By Phil - 19 January 2018

Goa could be Asia’s next boom market with analysts Union Gaming saying its gaming revenues could quickly surge to US$1bn if new legislation moves it from riverboat-based to land-based over the next few years.

Macau’s GGR was 33 times this last year whilst Las Vegas came in at $26.2bn.

The government is currently discussing whether to create new entertainment zones in Goa to locate the country’s casinos together on land with licenses only granted to the current existing offshore casinos.

Union Gaming’s Grant Govertsen said: “We compare the Goa transition from riverboat to land-based, as like the Midwest riverboat transition story on steroids. We expect the government’s formal announcement early this year. We expect Goa to quickly become a US$1bn market as it transitions to land-based casinos (from US$150m today), which is still just a fraction of India’s total GGR potential of US$10bn to US$17bn.”

“The introduction of the country’s first true integrated resorts should result in expansive growth in gaming revenue given significant pent-up demand for a high-quality gaming/entertainment experience,” he added.

Union Gaming said casinos in India were in their infancy but that the sector would grow ‘driven in part by economic factors, improving national infrastructure, and a greater acceptance of gaming.’

Delta Corp, owned by Jaydev Mody, currently operates gaming floors in the Indian states of Goa and Sikkim. It is hoping to soon secure a licence in Daman and has recently bought land close to Goa’s airport. It also received a licence to operate in Kathmandu, Nepa, where it is due to open in 2019, marking its first move out of India.

Hardik Dhebar. Chief Financial Officer of DelatCorp, explained: “We do not know today whether we will be required to put all the three casinos in the same location. The size and scale of the casinos onshore are going to be multifold larger than what we have on the existing setup. If you look at our total square footage under gaming is about 45,000 that will be going up to roughly about 3.5lakh square feet, in terms of number of tables we have currently about 180 to 200 tables across three casinos that would be at least going up four times to about 800 tables. We are a business, which is now more matured than what we are a couple of years ago and we believe that we are at a stage and at a platform from where we will take off.”
Union Gaming expects it to lead any new fangled Indian casino industry.

Anubhav Gupta, an analyst with Emkay Global Financial, said: “In the coming quarters we expect even stronger earnings growth momentum given by the rising footfalls in Goa and Sikkim Casinos and the ramp up of the online gaming business. We see Delta Corp as the multiyear growth story with multiple catalysts from further acquisitions in the online business, the Daman Casino launch and new casino policy in Goa, which would permit offshore operators to shift to land.”

Mr Govertsen said: “Delta, with a 70 per cent supply share of Goa today will be the leading land-based player. We expect the company to not only maintain this dominant market share, but to grow it as it leads the transition to land-based gaming in Goa. Once it receives its gaming licence in Daman, Delta Corp will be the only company that has a presence in all three legal Indian gaming jurisdictions: Goa, Sikkim and Daman,” said the brokerage in Friday’s note.

The analyst believes Delta’s GGR will increase by 34 per cent this year, followed by 20 per cent increase over both of the next two years. Its revenues for the last quarter came in at US$25.4m marking an increase of 56.7 per cent from the quarter last year. Its casino revenues increased by 73 per cent whilst its online revenues increased by 18 per cent.

DeltaCorp added: “The casino business is at a nascent stage and can be expected to report high rate of growth for the next couple of years. Operating margin expansion is possible going forward given that the revenue momentum sustains.”