Indian gaming stocks plummet after 28% tax hike

Delta Corp shares closed 23 per cent lower while Nazara Technologies stocks fell 3 per cent.

India.- Shares of an Indian casino operator Delta Corp and Nazara Technologies, which powers several online gaming apps, fell 23 per cent and 3 per cent respectively following the Goods and Services Tax (GST) Council’s decision to impose a tax rate of 28 per cent on the full face value amount for online gaming, casinos and horse racing betting.

Delta Corp shares reached an intraday low of Rs 178.20. Nazara Technologies shares opened 14 per cent down but recovered to close at 3 per cent down from the previous day.

Nazara Technologies clarified that the tax would only apply to the skill-based real money gaming segment of its business, which contributed 5.2 per cent to the company’s consolidated revenues in the last financial year. The company said it was taking proactive measures to mitigate potential impacts and anticipated minimal impact on overall revenue.

While many online gaming firms welcomed the 28 per cent rate, some fear that an increase in taxes could encourage players to choose illegal gambling websites.