INDIA

Goa casinos await “transformational” policy changes

Goa’s offshore casinos, which currently float in the Mandovi River, are waiting for the government to finalize legislation that will force them to shift onshore, which may prove a game changer for the industry in India.

The government has said it wants all six of the casino boats to move to an area zoned for entertainment within the next four years. Details of the policy are not yet available, though the area is expected to be near the new international airport in Mopa.

Goa and Sikkim are the only two states in India that allow casino gambling. The Union Territory of Daman in theory also permits casinos, though a license application from India’s biggest operator, Delta Corp, has been pending for several years.

Moving to onshore locations will allow investment into a more sophisticated product offering, more similar to the IRs seen elsewhere in Asia and that may help to satisfy pent up demand. According to Delta, the industry in Goa has been growing at about 30 percent a year, even with the current limited supply and that growth is likely to continue, fuelled by an expanding middle class seeking a wider variety of entertainment options.

“Operators should use the move onshore as an opportunity to redefine the gaming experience and industry in Goa,” said Kit Szybala, Partner and Executive Director of Operations at Global Market Advisors. “If they take the right development and regulatory steps, the boost in market revenue and regional economic impact could be considerable.”

According to a report by Union Gaming Securities Asia Managing Director, Grant Govertsen, Goa has the potential to rapidly become a $1 billion market, up sharply from the $150 million that the boats are estimated to generate at present. Overall, Govertsen says India’s casino industry has the potential to generate GGR of $10 billion to $17 billion.

The move onshore is “transformational,” he notes. “We compare the Goa transition from riverboat to land-based as like the Midwest riverboat transition story on steroids.”

Szybala, who has conducted in-depth research into the potential for India’s gambling market, notes that the current offering in Goa appeals to more gaming focused patrons. Introducing IRs with a wide variety of amenities, including attractive hotels, food & beverage outlets, entertainment, and retail options, will help to attract a broader audience and perhaps shift perceptions in India when it comes to what legalized gaming can offer.

Delta, which operates three of Goa’s floating casinos, has welcomed the proposed changes and said it’s positioning itself to take full advantage.

Chief Financial Officer Hardik Dhebar told analysts on a recent conference call that the company has already identified land parcels and is at an advanced stage in the acquisition process on some of them.

“By the time the final policy and the framework will be out, we would have been able to complete or we would be nearing the completion of the acquisition of the land parcels,” he said. “While in the past, we have made very clear that Delta will continue to focus on the asset light model and will not invest any capital into any ancillary businesses such as hotels or water parks or retail or theme parks or anything, but yes we will facilitate the development of an entire township entertainment zone, which basically will not only be the supporting infrastructure but also will complement the gaming and the casinos that we would be coming up within the entertainment zone.”

Union Gaming notes Delta currently has a 70 percent share of the Goa market and is likely to become the leading land-based player. “We expect the ROI story on the company’s ~$300 million Goa IR to be reminiscent of Sands Macao when it first opened.” it said.

The policy is expected to be formally announced early this year, though it may get caught up in political infighting. The government has been threatening for years to force the boats to move out of the Mandovi River, though has not yet followed through.

Operators should use the move onshore as an opportunity to redefine the gaming experience and industry in Goa.

The opposition Congress party is already targeting the government for reneging on a promise to shut down the casinos altogether.

“When (Chief Minister Manohar) Parrikar was in the opposition, he led protests against casinos and promised to get rid of them completely after coming to power. However under the BJP government, the casinos have flourished in Goa. Rather than get rid of them the number of casinos increased. Against this background, moving the casinos to Mopa seems to be a way to claim to have done something about them, while the casino owners would be happy to get entrenched on land,” said a Goa based activist, connected with the pressure group, Aam Aadmi and Aurat Against Gambling (AAAAG).

Goa has a long history of governments claiming to be serious about regulating the industry but such intentions rarely get executed, said senior journalist Prakash Kamat, based out of Goa.

Kamat added that subsequent governments have come up with various plans regarding the casinos, which remained on paper. “They had earlier said a Gaming Commissioner would be appointed to keep a check on the activities of the casinos but it never happened,” he said.

As well as the six floating casinos, electronic gaming is permitted in some five-star hotels in Goa.

Golden Play awarded Sikkim online license

Golden Play Pvt. Ltd, an operator of online gaming in India’s northern state of Sikkim, plans to start casino operations and is eyeing further expansion in the region.

The company has won a provisional license to operate out of the the five-star Hotel D’Wang Residency in the Deorali area of Gangtok. It will be the fourth casino in the state. Golden Play is linked to the Mumbaibased Golden Gaming and Lottery Group, according to GLaws India.

The provisional license is meant to enable the company to set up the necessary infrastructure for commencement of casino games in the hotel and is valid for six months.

Gujarat deals blow to skill-based games

The Gujarat High Court has rejected a petition from poker clubs seeking for poker to be recognized as a skill game, ruling it as a game of chance.

Justice Rajesh H. Shukla of the Gujarat High Court dismissed the special civil petition filed earlier this year by KN Suresh of the Indian Poker Association and other poker clubs. The decision is being seen as a major setback for the online and skill games industry in India.

The petitioner clubs have indicated that they will be soon challenging the decision before a division bench of the High Court.