PANAJI
Casinos operating in Goa, mainly the off-shore ones anchored in the Mandovi, have themselves taken a gamble even as they scramble to quantify the impact that the recent 28% to 40% hike in Goods and Services Tax (GST) imposed on gaming services will have on their business: upwardly revising entry and other pricing structures to substantially pass on the tax increases to customers.
An official of one of the six offshore casinos said entry fees have been increased by Rs 500 for the lower bracket clients and the hike increases by up to Rs 1,000 for the premium and luxury segments.
"However the associated offerings which are inclusive, like the entertainment, drinks and food have not been compromised for now," the official in the managerial rank told The Goan.
“We’ve had no choice but to pass on some of the cost to customers,” the official of Deltin Royale, one of the largest casinos operated in the river said. He added that the hike in fees has not had a discernible impact on footfalls as yet.
Delta Corp, a BSE-listed company which owns and operates the Deltin brand of casinos was the first to react to the harsh GST levies a day after the new regime was announced by the Centre. It said, that it is keeping on hold the nearly Rs 2,500 crore worth project at Dhargal where it had planned multiple hotels and casinos besides other entertainment offerings, including a convention centre and a water park, on a 3.5 lakh square meter parcel of land it had already acquired.
The company's President of Operations and Chief Financial Officer (CFO) Anil Malani has gone on record to say that the GST hike could jeopardize not only the casino business but several other ancillary enterprises.
Casinos, according to him are an "entertainment hub" which supports multiple hues of economic activity and hundreds of jobs and livelihoods could be in peril.
With margins already tight, smaller players in the sector are looking at "austerity" to limit the impact of the GST hike in addition to hiking the entry fees. Slashing spends and budgets for promotions is one such measure, according to a manager-level executive with the Casino Pride ."With GST at 40%, we have no option other than slashing the spending on promotions and entertainment which affects the customer experience,” he said.
Industry observers, meanwhile, have already predicted that the steep GST hike will be a challenge for Goa’s offshore casinos to sustain. Other sectors dependent on it in the State's tourism-driven economy such as hotels, transport, and entertainment are also expected to face the brunt.
The casino industry is seen as one of prime attractions along with Goa's beaches and nightlife which have contributed to the growth in tourist arrivals the State has seen over the last two decades.
Industry bodies have already appealed to the Centre to reconsider classifying casinos as “sin goods,” while pointing out the sector's crucial role as entertainment venues thus contributing to the State's gross domestic product.
The All India Gaming Federation has said that the tax rate is "punitive and could cripple an important sector.”
