Delta Corp Q3 profit halves after online money gaming ban, 40% GST hit casino business

Casino and hospitality major Delta Corp Ltd on Thursday reported a sharp decline in profitability for the December quarter, as regulatory changes in online gaming, higher indirect taxes and a fall in casino revenues continued to pressure the company’s financial performance. The government had increased GST from 28% to 40% for sin goods like casionos.

For the quarter ended December 31, 2025, Delta Corp reported a standalone net profit of ₹19.38 crore, compared with ₹41.61 crore in the year-ago period, reflecting a drop of more than 53%. Revenue from operations declined to ₹117.86 crore from ₹150.17 crore a year earlier, primarily due to weaker gaming revenues.

On a consolidated basis, the company posted a profit after tax of ₹14.28 crore, down sharply from ₹63.78 crore in the corresponding quarter last year. Consolidated revenue from operations stood at ₹160.28 crore, compared with ₹186.88 crore in Q3 FY25.

Online gaming ban dents valuations

A major drag on the company’s overall performance came from the enactment of the Promotion and Regulation of Online Gaming Act, 2025, which prohibits online games involving real-money stakes. As a result, Delta Corp has written down the value of its investments in online gaming entities including Deltatech Gaming Ltd, Head Digital Works Pvt Ltd and Openplay Technologies Pvt Ltd.

The company recorded a ₹378.34 crore reduction in the fair value of these investments in its standalone books and a ₹459.52 crore impairment at the consolidated level, both routed through Other Comprehensive Income (OCI) during the current financial year.

Management said the carrying value of these investments has been reduced to nil, as the legislation has effectively halted the revenue-generating operations of these companies.

GST disputes remain a key overhang

Delta Corp also continues to face a major legal and financial overhang from long-running GST disputes, with tax authorities issuing show-cause notices alleging short payment of GST amounting to ₹23,207.30 crore across the company, its subsidiaries and an erstwhile associate for the period between July 2017 and November 2022.

The demands are based on GST being levied on the gross bet value rather than gross gaming revenue (GGR)—an issue that has impacted the entire casino and online gaming industry. Delta Corp said it has challenged these demands and secured interim relief from various High Courts. The matter has since been transferred to the Supreme Court, where arguments have concluded and judgment is awaited.

Based on legal advice, the company has not made any provisioning for the disputed amount, maintaining that the demands are arbitrary and contrary to law.

Impact of higher GST on casino operations

The company said profitability has also been materially affected by the increase in GST to 40% on the sale of gaming chips, which has weighed on margins in its core casino business. Management said it is implementing efficiency-led initiatives to mitigate the impact while continuing to engage with the government to push for taxation based on GGR, in line with global practices.

Expansion plans in Goa, hotel pipeline intact

Despite the regulatory challenges, Delta Corp said it remains committed to expanding its physical casino and hospitality footprint. The company is in the advanced stages of completing a new casino vessel for the Mandovi river in Goa, which is expected to be inducted by March 2026, with commercial operations likely to begin in April 2026, subject to regulatory approvals.

In hospitality, Delta Corp currently operates a 176-room five-star resort and a 106-key all-suite luxury hotel in Goa. Construction is underway on a 375+ key hotel and casino project in Panjim, with a soft launch targeted for the last quarter of FY27. Additionally, its subsidiary Delta Penland Ltd has acquired a 100-key hotel in Alibaug, expected to become operational in FY27.

Once completed, the company’s total room inventory under the Deltin brand is expected to exceed 750 keys, strengthening its hospitality portfolio.

Demerger, land monetisation under review

The company has also filed an application with the National Company Law Tribunal (NCLT) for the proposed demerger of its gaming and hospitality-real estate businesses into two separate listed entities. The demerger will be executed as a mirror split, with shareholders receiving equal shares in the resulting company. Delta Corp expects the process to be completed within six months, subject to approvals.

Separately, the company has put on hold the development of an integrated resort on its Dhargal land parcel in Goa, citing the current regulatory and tax environment, and is exploring options to monetise the asset.

While Delta Corp continues to face near-term headwinds from taxation and regulatory uncertainty, management reiterated its focus on capital discipline, operational efficiency and long-term value creation. Key triggers for the stock include clarity on the GST litigation, execution of the demerger and recovery in casino volumes amid the evolving tax regime.