Delta Corp’s bet goes bust as stock drops 9% on RMG ban, 34% lower in a year

Delta Corp shares have corrected 9% in the past three sessions weighed down by news of ban on real money gaming (RMG) extending their underperformance of more than a year now. The stock is trading below its 50-day and 200-day simple moving averages (SMAs) of Rs 88 and 97, respectively, and the chart structure shows a further downslide.

With the Modi government turning on the heat on the online gaming companies, both the ban on RMG and the likelihood of a sin tax are being seen as setbacks.

Commenting on the current trends, Kunal Kamble, Senior Technical Research Analyst at Bonanza said that the Delta Corp shares have failed to sustain above a key break-out level of Rs 96.50 despite finding strong buying interest at its support near Rs 81, which propelled the stock towards Rs 98.80. Moreover, the stock also faced rejection from its 200-EMA, which continues to act as a strong resistance, he said, adding that he expects Delta Corp to likely consolidate within a range of Rs 82.80 – Rs 96.20 in the near term.


"A decisive close above Rs 96.50 should be considered a buying opportunity, as it would attract further participation from buyers and potentially lead to an extended upward move. On the downside, a break below Rs 82.80 would shift the control to sellers and could lead to further weakness," Kamble said.

Anuj Gupta, Director at Ya Wealth Global Research said that the stock looks weak on the technical charts following a three-day decline on the trot. The stock has a strong support at Rs 81 and if this level is breached, it may test 70 to 65 levels, he warned.

Any rally can be expected if the stock surpasses a crucial resistance of Rs 100 which is unlikely to happen amid unfavourable sentiments with the bill becoming an Act, Gupta said. His strategy is a sell on rise on Delta Corp shares.

Why the setback?

The Promotion and Regulation of Online Gaming Bill, 2025 bans online money gaming, which is the depositing of money for winning money or other stakes. This move impacts games such as rummy, poker among other things.

Earlier, under Indian law, games of skill were legal while games of chance were considered gambling and prohibited which meant that wagering money on games of skill was legal, Vikram Jeet Singh, Partner at BTG Advaya said. But now RMG even in games of skill is banned while advertising RMG is also prohibited.

"One reason that has been suggested for this ban is the alleged use of RMG for money laundering activities. India’s online gaming market is valued at almost USD 4 billion, which will take a hit following this - banning RMG may also have an impact on people employed in the gaming sector," Singh said.

While Delta has business interests in the hospitality sector as well, a lion's share (94%) of its revenue is derived from gaming operations. In Q1, the company earned Rs 173 crore from gaming operations out of Rs 184 crore net sales from operations. The hospitality business delivered a topline of Rs 12 crore.

Delta Corp Q1 revenue from operations stood at Rs 184 crore, up 3.5% from Rs 178 crore in the year ago period while remaining flat on a sequential basis. The net profit rose 36% YoY to Rs 26 crore versus Rs 22 crore in the year ago period.

Delta Corp share price action

Delta Corp's slides precedes the twin whammy as the stock has slipped 34% in the past 1 year. This year, the fall has been to the tune of 24%.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)