One of India's largest gambling companies, Delta Corp, sensationally announced on their website last week that they had been given permission by the Foreign Investment Promotion Board (FIPB) to seek out investment for their business from outside of India.
If this is true, then it would be directly contrary to the Foreign Exchange Management Act (FEMA). FEMA sets out that under no circumstance can Foreign Direct Investment be used by companies involved in gambling.
Therefore, if Delta Corp have been granted permission to seek outside investment, then this might set a new industry precedent. Delta Corp own half of the off shore casinos in Goa, including the famous Casino Royal, where last weekend's World Gaming Festival was held. Delta Corp is also involved in a Casino development project in the Union Territory of Daman.
Companies rumoured to be interested in investing include Caesars Entertainment and MGM Resorts. Both of these companies are global leaders in the casino industry and are obviously very keen to enter the potentially lucrative Indian Market.
The FIPB permission, however, is not confirmed and it is reported that FIPB officer Bhaskar Chakrabarti recently denied all claims that Delta Corp had been granted permission to seek FDI.
There are a number of questions that will be raised if Delta Corp do manage to secure outside investment. Other companies present in India such as Sugal & Damani and Playwin will want to know why they have not been given permission to seek FDI. Also, companies will want to define whether investment can be given to online companies as well as companies such as Delta Corp, who are predominantly land based.
It is still to be seen whether Delta Corp will manage to raise foreign investment without being reprimanded by the government. However, if they do, many will see it as a step forward in a nascent industry which has only just begun to realise it's own potential.
0 Comments
