Shares of Nazara Technologies and Delta Corp saw sharp swings after the Indian government introduced a draft bill to ban all forms of online real-money gaming (RMG). While Nazara’s stock tumbled, Delta Corp managed to recover losses, highlighting the contrasting market impact of the proposed legislation.
Nazara Technologies Limited, headquartered in Mumbai, is a diversified gaming and e-sports company operating across interactive gaming, e-sports media, and gamified early learning. The company has expanded its presence both in India and globally through investments and partnerships in the gaming ecosystem.
On Wednesday, Nazara’s shares slumped nearly 7 per cent to ₹1,306, marking their steepest intraday decline since January 13. The drop came after the Union Cabinet cleared a draft legislation proposing a nationwide ban on online real-money gaming (RMG). By mid-morning trade, the stock partially recovered but was still down 6.2 per cent.
Delta Corp Limited, India’s largest listed casino and gaming company based in Panaji, Goa, also saw its shares fall 6.75 per cent to ₹86.6 in early trade. However, the stock quickly rebounded, trading marginally higher by 0.4 per cent around 10:00 AM.
Crackdown on Online Real-Money Gaming
The draft bill approved by the Cabinet proposes strict penalties against companies and individuals involved in offering or facilitating real-money gaming services. It specifically prohibits “offering, aiding, abetting, inducing, or otherwise enabling online money gaming services,” classifying such activity as an offence.
Additionally, the bill suggests that banks and financial institutions must not process or facilitate any transactions linked to online RMG platforms. This could significantly disrupt the business model of unlisted operators such as Dream11, MPL, Rummy, and Poker platforms, which rely heavily on digital payment flows.
The move follows the imposition of a 28 per cent GST rate on online gaming revenues in October 2023, a tax that the industry has contested in the Supreme Court for both its levy and retrospective applicability. Reports also suggest that policymakers are considering raising the tax rate to 40 per cent, aligning RMG with other high-tax “sin goods” categories such as tobacco.
Nazara’s Indirect Exposure
Nazara Technologies clarified that it has no direct exposure to RMG businesses. However, the company holds a 46.07 per cent stake in Moonshine Technologies Pvt. Ltd., the operator of PokerBaazi.
Nazara highlighted that since it does not exercise majority control, Moonshine’s revenue is not consolidated into its financial statements. The company had earlier invested ₹805 crore in Moonshine through a mix of cash and stock, along with ₹255 crore worth of compulsory convertible shares.
Despite the limited financial linkage, investor sentiment around Nazara’s indirect exposure triggered a sharp selloff in its stock.
Also Read: Stock Market Crash: 281 Stocks Sink to 52-Week Lows, 64 Reach New Highs
Delta Corp’s Position
For Delta Corp, the draft bill poses a different scenario. The company’s primary operations are land-based casinos in Goa and Sikkim, which are not covered under the proposed ban. While Delta has some presence in online gaming, its physical casino business remains the main revenue driver, providing resilience against the regulatory clampdown.
The contrasting trajectories of Nazara and Delta reflect the divergent risk profiles of companies exposed to the gaming sector.
READ MORE ON
