Goa’s floating casinos will get an extension of a further six months before they are forced to move from their current location in the Mandovi River, according to local media reports.
The extension runs through to September. Under new legislation, that has not yet been passed, the casinos are being forced onshore to a specified entertainment zone.
The extension reprieve comes after the government this week slapped increases of as much as 4.5 times on the license fees for the operators, which are now pushing for a review.
“The massive hike will drastically impact not only the casino business but also the tourism industry”, said Damodar Bhatkar, liaison officer of Maharaja casino was cited as saying.
Legislation setting out the details was scheduled to be published in the February-March budget session, but has been delayed due to the illness of Chief Minister Manohar Parrikar.
News of the fee hikes sent shares in the biggest operator, Delta Corp, down by more than 16 percent in Bombay trading on Wednesday.
Union Gaming analyst Grant Govertsen said the drop was over done and represents a buying opportunity for the stock.
“The government, in its plans to move to land based casinos, is ratcheting up the license fees now as a prelude to the law’s implementation to effectively put the existing land-based small-scale electronic casinos out of business and thus clean up the market in advance of true IRs,” he said in a note.
The fall in the share price is “more than baking in the worst-case downside in terms of potential earnings impact and hence creating a buying opportunity.”