INDIA

Mandovi deadline loomsas politicians wrangle

The fate of Goa’s floating casinos is still unclear as a deadline for their removal from the Mandovi River looms, with industry experts urging the government to proceed with caution when it comes to moving them onland.

Relocating the six casino ships has been on the cards for years and has dominated the debate in the current session of the legislative assembly, which ends on Aug. 9, but no decisions have been made.

The casinos were given a further six-month extension in March this year, but after that they will be asked to move from the river.

In theory, operators are keen to make the move. A site has been set aside near the new airport in Mopa, with the idea to create a dedicated gaming zone, which analysts have said will be a gamechanger for the industry in India. It would allow the development of higher quality integrated resorts, which the country is currently lacking.

Land-based casinos are only legal in Goa and Sikkim, though the country’s biggest operator, Delta Corp, has applied for a license for its fivestar property in the Union Territory of Daman.

The trouble in Goa is that the government is torn between public opposition to gambling and the need to attract tourism revenue in its highly tourism dependent economy. Pressure groups have also complained about the noise from the river boats and argue they are dumping their waste into the river.

Goa attracts around 3 million tourists annually and around 12 percent of all foreign tourist arrivals in India, who spend around $350 million annually.

The government levies a 15 percent tax on gaming revenue, comparing favourably with many jurisdictions around Asia, though it’s not expected to issue any further licenses.

The trouble with the upcoming deadline for shifting the casinos is that the new airport is a few years from being completed and key infrastructure requirements are still to be fulfilled.

An alternate site, Aguada Bay, has been discussed in media reports but none has been confirmed by the government.

Vidushpat Singhania, a Delhi-based lawyer specialised in gambling laws, cautioned that the Goa government needs to consider the concerns of the casino operators before making any move. “The government needs to bear in mind that the casino operators have paid to acquire the licenses. Moving them out of the Mandovi river without making sure that the other locations are ready would be a breach of the license conditions which the government agreed to. The casino operators would be justified in seeking judicial intervention if that happens,” Singhania told AGB.

It’s a win, win for everybody, for the government, for the people and for the industry.

According to Singhania, the casinos should be permitted to remain on the Mandovi river as long as the situation remained unclear. “They should also be allowed to avail of a longer transition period,” he added. The Goa government had previously said that the casinos would have three years to make the move.

Roland Landers of the All India Gaming Federation agreed with Singhania.

“The Goa government needs to move in a fair and planned manner. The casinos bring revenues to the state’s exchequer. All the stakeholders should be considered and consulted before any decision is taken.”

Currently, the casinos generate US$150 million in revenue, but Union Gaming has forecast that number could rapidly rise to $1 billion were the casinos to be moved onshore.

Delta, which operates as the Deltin brand, has already made clear it’s infavour of relocating to Mopa and has invested in land for development.

“The new Gaming Policy proposed by the state of Goa is also expected to bring several positive changes. Onshore casinos are far easier to scale up, as well as more stable from a business perspective and offer significant cost benefits,” the company said in its annual report for the FY 2017-18. “We have acquired 100 acres of land and are looking to acquire an additional approximately 50 acres of land for an entertainment destination or a recreation zone,” the report added.

“The travel time is less, there is no traffic in the river and all the allegations on so many other aspects of being in the river goes away. It is a win-win for everybody, for the government, for the people and for the industry. It makes a lot of sense,” Chairman Jaydev Mody told local media.

Delta owns three of the six offshore licenses in Goa and has a property in Sikkim, providing a total of 1,700 gaming positions. If it gets approval for Daman, the number of tables will almost double.

In its analysis of Delta’s future prospects, the financial analysis firm Motilal Oswal predicted that the company is likely to see compound average growth in its gaming business of 38 percent this year.

Skill games tipped for strong expansion

India’s skill-based gaming market is expected to grow by more than three times its current level in the next four years, driven by rising smartphone connectivity and growth in rural areas, according to Naveen Goyal, CEO of Adda52.com.

Goyal told delegates at the World Gaming Executive Summit in Barcelona that the market will hit $2 billion by 2023 from its current $600 million level.

The market stood at just $20 million five years ago. Over the next four years smartphone penetration is forecast to rise from 350 million to 600 million.

Skill-based games, such as rummy, poker and fantasy sports, are legal in India, though pure games of chance are banned.

Dream11 is India’s first gaming unicorn

Dream11, a fantasy sports start up, has become the country’s first gaming unicorn, attracting a valuation of $1 billion or more, local media reports.

The valuation followed an investment by Hong Kong and London-based Steadview Capital. Dream11’s existing backers, Kalaari Capital, private equity firm Multiples Alternate Asset Management and San Francisco-based hedge fund Think Investments, sold a portion of their stakes in the decade-old company, valuing it at $1-$1.5 billion, local media cited sources as saying.

The secondary deal is in the range of $60 million, sources said.