Jaydev Mody, the charismatic Chairman of Delta Corp Limited, runs a casino empire in India-the Deltin Royale and Deltin Jaqk in Goa. A third casino in the state, Deltin Caravela, is awaiting approvals. The company is also readying the launch of gaming operations in the Union Territory of Daman. In an interview with Goutam Das of Business Today, Mody talks of the growing gaming market in India as well as the hospitality business he dislikes-the company runs three hotels.
When did you start thinking of casinos as a business opportunity?
There was only one casino in Goa that was offshore (floating casinos on rivers) for several years, since around 2000. Prior to that, there were several onshore casinos in five-star hotels. The government then said it would issue up to six licences for offshore casinos and that is the time when I applied. There were 20-21 people who had applied. I was very active. I bought one ship immediately. Then, we built a ship in Goa. Then we acquired a company that belonged to Advani Hotels. We wanted to have a leadership position. We were the earliest along with Pride, our competitor. Today, we run the best casinos in Goa. Our ships are the best looking and the management most professional.
You commented somewhere you don't like the hotel business. Why get into it then?
There were two constraints of running casinos in Goa- number of flights coming into Goa and the number of hotel rooms. On important weekends, we wouldn't get rooms. You were losing the player. We decided to invest in hotels. I don't like the business. Standalone, it doesn't make sense. If you do 150-room hotels in four cities-take a Category A city like Mumbai, then Bangalore, Goa and Ranchi-buy land, do three years of construction, and say you get an average room rent of Rs 10,000, see if you can make money. There's no way you can make money. At best, on an operational level, you can break even. I wouldn't build a hotel where I didn't need the rooms for my casinos. Both the properties in Goa ( Deltin Suites and Deltin Palms) are aimed at catering to casinos first. Once players have got their rooms, we would do other bookings.
Can you size up the gaming India in market?
In casinos, Sikkim must be doing Rs 50 crore on an annual basis. We do around Rs 250 crore. Our competition does a bit less. So the casino market is in the range of Rs 500 crore per annum now. But in cricket, they do Rs 5,000 crore a game. Every city has matka. The total market must be Rs 500 crore a day. So our thing is just a drop in the ocean. If the government legalises cricket betting, they will get huge revenues out of it. The can monitor it too. Today, it is wild. Then, we have race betting, in which Mumbai is Rs 170 crore per annum. There are seven-eight centres. Overall, it must be in the range of Rs 1,000 crore.
Tell us about the growth of the casino business in India. Is there a demand-supply mismatch?
No, capacities have been growing over the last seven years. The business has been trying to match the demand. There are casinos in Goa and Sikkim. Then there are players who go to Sri Lanka, which is also close to the southern states. Now Daman will open up where we will add several gaming positions. It will take one and half years to get the sales efficiency. Then I hope the opportunities for licensing will improve; more casinos will come up but it won't happen like it did in the US and Europe. India grows at a steady pace in terms of licensing and market growth. It also depends on what they do to illegal cricket betting-there is a huge gaming market.
Any plans for Sikkim?
It is extremely difficult to get there. It is a whole day's travel today. The average flight time from any point in India is 2.5 hours. Then there are no direct flights from many cities. Then it is a three-hour drive to the city. If you leave home at 10 in the morning, you will reach Sikkim at 8 pm. So, going and coming back wastes two days. There is no clarity on when the new airport will be ready. But we will look at the opportunity at some point. Right now, we don't think that the market is big enough.
What makes Daman a great place for casinos?
It is a driving-to-destination market. From Gujarat, there are several cities you can drive from. From Bombay and Pune too. If you have a five-hour driving radius, you have a huge market. The market may be larger than Goa - in Goa, you are Rs 8,000-10,000 down on your ticket to start with. Then you have to be picked up and dropped at the airport. The market for drive-in is huge. In a car, you can share costs between friends. So four friends are not Rs 20,000 down even before they play. There will be more money in the hands of customers.
What about international opportunities?
We have land in Colombo, hoping that we will get a proper policy in place. But we got no clarity. The legislation is grey. Other opportunities are in established markets such as Europe, the UK and the US. There we have no edge. We have no intricate knowledge of those markets.