Casino, gaming stocks crash after 28% GST levy
casino firms after the GST Council levied the highest slab rate on online gaming, horse racing, and casinos. The decision is expected to impact gaming volumes besides slowing down future foreign investment and the viability of gaming companies — especially in the start-up space — that have recorded impressive growth in recent times, said analysts. The 28% levy is the highest standard rate and typically covers most luxury items.
Shares of Delta Corp, which is engaged in casino and gaming, saw the worst fall ever and had only sellers after hitting four lower circuits in Wednesday's trading session. The stock, which tumbled as much as 29% to a low of ₹175.65, closed at ₹190 on the NSE, down 23% over Tuesday's closing. «The new GST rate is very disruptive for the industry,» said Sandip Sabharwal, founder of Asksandipsabharwal.com.
«Investors should avoid bottom fishing. The probability of further declines is high as most businesses become unviable at this rate and it will take time for value to emerge again.» Over 90 million Delta Corp shares changed hands on the BSE and NSE, about 30 times their combined average daily volumes for the last month, exchange data showed. «This is a major setback to the online gaming industry,» said Gouri Puri, partner at Shardul Amarchand Mangaldas & Co.
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