Gaming Report: Delta Corp Posts Healthy Revenue Growth, Steadview Capital’s Secondary Investment Propels Dream11 to Unicorn League & More

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  • Namita Ghosh April 10, 2019
  • 6 Minutes Read

India’s only BSE-listed gaming company Delta Corp posted healthy growth figures for Q4 of the current financial year. A 25.35% rise in the net profit of the company spells good news for Delta, though the sluggish 11% growth in online gaming business only adds more credibility to talks of the impending sale of Adda52 by the group company.

Dream11, India’s top market player in the fantasy sports segment has now climbed into the exclusive ‘Unicorn Club’! The much-anticipated secondary transaction into the company from London-based Steadview Capital has come through and is reportedly in the range of $60 Million (~₹415 Crores).

It`s cricket season, and brands are going gung-ho on promotions. The latest ad campaign of fantasy gaming portal HalaPlay has the Pandya brothers, Hardik Pandya and Krunal Pandya ‘breaking the Bro-Code’.

In the U.S, the federal Department of Justice (DOJ) recently clarified that its revised opinion on the Wire Act 1961 does not address lotteries.

Fantasy sports portal StarPick meanwhile has introduced ‘Fantasy MatchUp’ an innovative head-to-head duel game with an exciting format and, in a recent crackdown against illegal gaming, a joint police-military team in Thailand seized illegal slot machines from two adjacent shophouses.

 

Delta Corp in Top Gear, Posts 25.25% Consolidated Net Profit Growth in March 2019, Online Gaming Revenue Growth Sluggish

Delta Corp is the country’s only BSE-listed gaming and entertainment firm with casinos in Goa and Sikkim, in addition to online poker brand, Adda52.

Delta Corp

Back in October 2018, the country’s leading casino operator had posted double-digit profit growth in the fiscal quarter Q2 ending September 30. The company’s net revenue had grown by 39% to ₹2,014 Million on a year-on-year (YoY) basis. The healthy growth figures were primarily attributed to Delta gaining market share from smaller land-based casinos post the license-fee hike announcement by the government.

The results for the fiscal quarter ending March 2019 have been made public by the company, and it seems that Delta is in top gear! Not only has the net profit of the company risen by 25.35% to ₹56.72 Crore as against the ₹45.25 Crore during the previous quarter, but the net profit of the company also rose by 26.49% to ₹196.76 Crores for the financial year ending March 2019.

Delta’s latest financial disclosures have kept most brokerages bullish on the company stock. While Motilal Oswal Securities put a buy call on Delta Corp with a target price of ₹329, Emkay maintained ‘buy’ with a target price of ₹380 per share.

Listing Delta’s investment in cruise gaming, online fantasy game and Nepal’s casino business as top contributors for the company’s improving gaming revenue in 2019-20, Emkay has also predicted that continued popularity of Delta’s live casino events and operations will propel the company’s FY20 revenue to grow to 27%.

But while Delta Corp has posted strong growth, the figures also tell a different tale. If Delta’s casino business saw a 21% rise in quarterly revenue, its online gaming business relatively underperformed with a below-par 11% growth.

Clearly, Delta’s offline operations have proved far more profitable than its online ventures, and the online operations have been pulling the company down, driving home the possibility of Delta looking to offload Adda52.

Unconfirmed reports indicate that Delta Corp is looking for a possible buyer for Adda52 and is in advanced stages of talks with a few potential buyers. Coupled with the fact that Delta only recently divested its Fantasy Gaming venture to join hands with HalaPlay could indicate that the firm is pulling its hands from the online gaming segment while continuing to stay invested as an investor.

Ironically for Delta, if it does choose to sell off Adda52, it stands to lose the significant synergy that its casino poker operations have shared with the online site.

 

Steadview Capital’s Secondary Investment Makes Dream11 India`s 1st Gaming Unicorn

Dream11 is India’s top online fantasy portal, and when news broke out last month that London-based company, Steadview Capital was in talks with the fantasy major for a potential secondary investment in the company, it created quite a stir in the gaming industry. According to reports back then, Steadview was looking to make a secondary transaction worth $100 Million (₹710 Crores) in the company, the post-money valuation for the reported transaction was being estimated at $1.3 Billion to $1.5 Billion (₹70,75,55,00,000), effectively making Dream11, India’s first gaming unicorn!

Dream11

Fresh reports confirm that the secondary investment has gone through after three of Dream11’s existing investors, Kalaari Capital, Multiples Alternate Asset Management and Think Investments sold some of their stake in the firm. As per a Brand Equity report, the secondary transaction is in the range of $60 Million (₹415 Crores).

Confirming the transaction, CEO of Dream11, Harsh Jain is reported to have said, “We are excited to welcome Steadview Capital onboard! Providing great returns to our shareholders, whether investors or Dreamsters, is very important to us and further reinforces their belief in Dream11. We will keep working hard and are targeting to end the year with 100 million users.”

Founded by Bhavit Sheth and Harsh Jain in 2008, Dream11 is the first Indian gaming company to have broken into the unicorn club – a list of privately held consumer and technology ventures valued at $1 Billion and more. Over the past year alone, the portal has charted an unparalleled growth chart in expanding its user base and attracting investors.

In April 2018, the company received an investment of $100 Million (₹719 Crores) from Chinese social media and gaming conglomerate, Tencent Holdings. After crossing the 5 Crore mark in registered users, Dream11 went on to state that its goal by the year-end was to reach an ambitious 10 Crore registered users. A tall order it seemed, but the portal looks well on its way to achieve the mark. After entering a four-year exclusive partnership with the Board of Control for Cricket in India (BCCI) that made Dream11 BCCI’s official partner for the VIVO Indian Premier League (IPL), the portal further ramped up his marketing arsenal by signing deals with seven IPL teams and cricketers for its various marketing campaigns during the ongoing IPL series.

With Steadview Capital’s secondary transaction coming through, Dream11 has cemented its investor backup even further.

 

HalaPlay Launches New Ad ‘Bro Code’ With Pandya Brothers

IPL is the busiest time of the year for fantasy sports portals and rightfully so! Dream11 may have the current run over the domestic fantasy market, but Hala Play is another player actively working on grabbing a share of this exploding market. Only last month, BSE-listed gaming and hospitality major Delta Corp invested ₹15.50 Crores in HalaPlay. With a fresh investment boost, HalaPlay seems to have entered the cricket season with many plans up its sleeves. In an attempt to engage cricket fans, HalaPlay has now launched a new ad campaign called ‘Bro Code’.

HalaPlay Ad

Produced by L&K Saatchi & Saatchi, the three-film campaign features HalaPlay’s two brand ambassadors, Hardik Pandya, and Krunal Pandya. It highlights how the ‘Bro Code’ is sacred but can still be broken when HalaPlay’s winnings are at stake. It shows Hardik promising to add Krunal on his HalaPlay team but actually removing him to reduce competition.

Talking about the campaign, co-founder of HalaPlay, Prateek Anand said, “Fantasy Sports has become a way of life for many Indians, which is where we see our exponential growth come from. At a product level, our attempt has been to put the power in the hands of our player community and create a feeling of collectivism, hence the introduction of a strong product hook, like the no platform fee for games between friends/brothers.”

Anand added, “L&K Saatchi & Saatchi helped us fuel the momentum further during the prime cricketing season by creating our first campaign, leveraging Hardik and Krunal Pandya’s cricketing skills and their mischievous brotherly chemistry.”

The digital films are currently running on Hotstar and Facebook.

Manish Agarwal, Chief Executive Officer of Nazara Technologies Ltd. that holds a major stake in HalaPlay said, “This is a fantastic start to a long journey which all the teams have embarked upon and we are confident of establishing HalaPlay as a very strong consumer brand.”

Watch the HalaPlay TVC here:

 

U.S. DOJ Clarifies New Wire Act Opinion Does Not ‘Address Lotteries’

There is a storm brewing in the gaming, and legal landscape in the U.S. after the country’s Department of Justice (DOJ) came out with a revised opinion on the Wire Act, 1961, but the DOJ has recently clarified its stand on lotteries.

US DOJ

In its latest filing that includes a memo dated April 8, signed by Deputy Attorney-General Rod Rosenstein, the DOJ has underlined that in its new opinion that was made public in January 2019, the DOJ did not imply that lotteries are impacted by it.

Rosenstein stated in the memo that is addressed to the FBI and U.S. attorneys, “The OLC opinion did not address whether the Wire Act applies to State lotteries and their vendors. The Department is now reviewing that question. Department of Justice attorneys should refrain from applying Section I 084(a) to State lotteries and their vendors, if they are operating as authorized by State law, until the Department concludes its review.”

The Wire Act prohibits certain types of betting businesses. A 2011 legal opinion by the DOJ deemed sports betting illegal, but in 2018 the DOJ revised it and stated that that the Act applies to any form of gambling that crosses states lines. The revised opinion rendered legalized intrastate and interstate online gambling illegal.

The New Hampshire State Lottery (NHSL) has filed a federal case questioning the new DOJ opinion. The DOJ has sought dismissal of the case.

Rosenstein’s statement effectively implies that the new DOJ opinion on the Wire Act does not apply to lotteries. While this could be an attempt to sidestep the federal case by NHSL, whether the DOJ can omit lotteries out of the purview of its own revised opinion is also questionable, looking at the fact that many forms of lottery including Powerball and online lotteries have at least one interstate component.

StarPick Launches New Fantasy Game ‘Fantasy MatchUp’

Fantasy sports platform StarPick has introduced an innovative game – ‘Fantasy MatchUp’. StarPick uses white label software from Norwegian B2B company Scout Gaming and with the launch of the game, has become the latter’s first operator to introduce the proprietary game.

Fantasy MatchUp

Featuring a first-of-its-kind head-to-head duel between two players, the game has an exciting format and is easy to understand and play. According to a StarPick blog, there are pre-set duels between players of a team for the particular day and to participate in the Fantasy MatchUp, a user can select from a minimum of four duels to a maximum of 10 duels. Users have to predict which among the two players playing in a given match will earn higher points.

Co-founder and CEO of StarPick India, Trigam Mukherjee said, “Fantasy Matchup is a radical and innovative game we have introduced on our platform. Globally this concept is very new and it is now available to our users in India through StarPick. In fact, we are Scout Gaming Group’s first client to launch Fantasy Matchup. We believe our users will love this new format and test their skills and knowledge to get rewarded financially. My message to the users is ‘keep skilling it’.”

Soon the new format will also be available on other Indian fantasy sports platforms that use software from Scout Gaming, including Scoring11.

“StarPick is leading the innovation in the Indian Fantasy Sports market and we are of course delighted that they are the first operator to launch the Scout Gaming Group match-up game, based on our in-house-proprietary expected fantasy points,” said Scout Gaming Group’s CEO, Andreas Ternstrom.

In the game, the fantasy points accumulated in the duel are based on the player’s actual performance in the real game. Whoever garners the higher score at the end of the game wins the duel. All duels selected by the user should be correct, for him to win the game.

Thailand Busts Illegal Slot Machine Warehouse

Thailand has recently cracked down on illegal underground gambling machines. According to the Bangkok Post, a combined team of men from the 5th Infantry Regiment Task Force and the police raided two shop houses located in the Sadao district in X and confiscated 159 illegal horse-racing slot machines on April 6.

Thailand Slot Machines GR

The team also found gambling machine parts reportedly smuggled in from the Ban Dan Nok border checkpoint and kept hidden in the two shops. There was no gambling going on at the location. Two men present on the premises of the warehouses were detained for questioning. The Ban Dan Nok checkpoint connects Thailand to Malaysia. Thailand’s Gambling Act of 1935 prohibits casino gambling and slot machines in the country. For Thai residents looking for casino or slot machine entertainment, Cambodia is the nearest location.

What doesn’t meet the eye but is rampant in the country is the black market offerings in live and online casino and gaming. Last year during the 2018 FIFA World Cup, Thailand police unleashed a massive campaign to reign in illegal gambling and arrested thousands. In another major crackdown, a joint Thai and Chinese specialist ‘tech’ team arrested 58 Chinese nationals running online illicit casino operations in August.

 

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