Forbes India 15th Anniversary Special

Jaydev Mody: The Measured Gambler

An inveterate risk-taker, Jaydev Mody is building casinos in an arena that has seen some of the biggest players fold

Published: Jun 14, 2014 06:47:15 AM IST
Updated: Jun 16, 2014 05:50:03 PM IST
Jaydev Mody: The Measured Gambler
Image: Vikas Khot
Jaydev Mody on board the Deltin Royale, India’s largest casino ship

It is 2.30 am but in the Mandovi, the river that bisects Goa, the Deltin Royale is all bright lights and energy. India’s largest casino ship is bustling with every kind of punter, from honeymooning couples making eyes at each other over their  roulette chips to boisterous groups of mostly male vacationers, who start with the slot machines but eventually give everything a shot.

It takes a second look to spot the real gamblers, the high-rollers who have flown in simply to play: A steel mill owner engrossed at the blackjack table; the high-profile bodyguard of a Bollywood actor, here off-duty, with his family; the six Chinese women playing quietly with a mountain of chips piled high before them, determined to beat the house.

The ship, outfitted in ’70s décor, complete with glass chandeliers, is open all day every day of the year. The casino is spread over four levels, and regulars—identified by the colour of the wristbands they are given at the entrance—play in the far quieter Royale poker room on level three, India’s largest gaming room. Tourists are mostly confined to the first two floors, which house the casino’s basic facilities. A large crowd of young tourists throngs the entertainment zones that offer dining facilities and live music. In another hall, a soloist plinks a lonely melody on her keyboard.

This could be a regular day at the Deltin Royale. But the smiling staff seem to be on edge. That’s because Jaydev Mody, chairman of Delta Corp, the company that owns and operates the casino, has just stepped on board.

Deltin Royale’s casino manager Rajae Sarhan, a Palestinian by birth, shows us around the ship. He has been a part of India’s still-nascent legal gambling industry since its inception at the dawn of the millennium. He worked aboard Caravela, India’s first casino ship, brought to Goa in 2001 by Advani Hotels and Resorts. Mody, he remembers, was a regular. “He loved to gamble but only took measured risks.” Sarhan’s assessment of his boss’s betting strategy is arguably the core of Mody’s business philosophy too.

The 58-year-old entrepreneur, who started out in the real estate and construction business, moved to casinos six years ago. At 52, when most people start planning their retirement, Mody turned a pleasurable pastime into a profit-making enterprise by studying the casino business and forming Delta Corp. His first bid was with the Deltin Jakq, the first of what is now a trio of casino ships. In 2010, brushing aside concerns that plagued the floundering gambling industry, he bought out Advani Hotels’s gaming licence and expanded. He refurbished the ageing Caravela, then hauled MV Horseshoe from North America to India; now renamed Deltin Royale, it is the largest vessel on the Mandovi, almost eight times the size of the Caravela.

Since Delta’s entry into casinos, it has invested massively in the hotel business to support gambling. The group now operates three hotels—the newest is a Rs 400-crore property in Daman—which keeps the casino traffic also housed in their own establishments. “I hate the hotel business, but you cannot separate the two,” Mody told us later.

Slowly but surely, he is building an empire in a business that India—or at least our government—seems to regard as somewhat disreputable.

A week later, we caught up with Mody on his home ground, the resting stables at the Royal Western India Turf Club in Mahalaxmi, Mumbai. The club, which celebrated its 140th anniversary this April, is far removed from the bright lights and sounds of the floating casinos. Yet, historically, gamblers have been drawn to horses as much as to the tables.

Mody’s passion for gambling, both as a gamer and as a businessman, is rooted in his 40-odd years as a regular at the Turf Club. He started out as a young rider, moved on to becoming a punter, then an owner—he owns, either partly or fully, about 70 horses, and dabbles in breeding too—and has been on the club’s managing committee for several years now. Like most of his close friends, race-goers too, he finds the old-world charm of the racecourse irresistible.

Jaydev Mody: The Measured Gambler
Image: Vikas Khot
Mody’s passion for gambling, both as a gamer and as a businessman, is rooted in his 40-odd years as a regular at Mumbai’s Turf Club

Not everyone does. The perception of shady ethics in the gambling world hovers over the business in India. And Mody acknowledges that it has destroyed kingdoms and ruined families over the centuries. But, he points out, so have liquor and other more harmful things. Looking down at his pack of Marlboros (he has been trying to kick the habit for decades), he says, “I don’t find gambling negative at all. Gaming is fun and I enjoy it. As long as you have control and are a responsible gambler, there is nothing wrong.”

But he still exercises caution: Following the practices of international casinos, his staff keeps a close eye on customers, alert to signs of stress or despair, helped by hundreds of cameras monitoring guests and staff.

Apart from the frazzled gambler, they also watch out for cheats, who will go to any lengths to beat the system.  Often inspired by movies, gamblers are always looking for innovative ways to pull a fast one on the house. One poker player, for instance, always played wearing dark glasses and won very often. It took the Deltin staff three months to figure out that he was marking the cards with ink visible only through his glasses.

The staff are trained to keep tabs on those either losing steadily or those betting beyond their means. As Ashish Kapadia, managing director of Delta Corp, points out, “It is important to remember that you can never beat the house.”

And this is a broader philosophy at their casinos. Mody says, “We certainly don’t want the kind of guy who walks in to lose a crore, or even make a crore. We also don’t want a guy who comes in day after day, hoping to beat the system. We want people who come in to enjoy the good food, the music and the gaming.” However, some patrons find it difficult to just step back, he admits.
That’s a problem Mody doesn’t have. He doesn’t gamble much these days, he says, except when he travels. And he plays just one game, pontoon, a variant of blackjack. He has played it at casinos around the world. “It’s simply the thrill of winning.”

Internationally, gambling is big business, the kind that has forced otherwise-strictly-regulated countries such as Singapore to change their laws and issue casino licences. In 2005, arguing for gaming in Singapore’s parliament, Prime Minister Lee Hsien Loong said the city-state had to do it because it was “losing competitiveness in economy and tourism”. Its neighbour Malaysia, an Islamic state, has a vibrant casino industry open only to tourists.

In India, too, the business started with significant expectations. But none of the early movers in Goa, such as Advani Hotels, the Leela Group (with Casino Rio) and the Salgaocars (Carnival), were able to scale up. Gaming licences are slow to come by, and taxes keep rising. Most have either sold out to new entrants or are waiting to do so. For Mody’s Delta Corp too, growth occurs in fits and starts, dependent on the state’s whim. Yet the company, which notched up revenues of Rs 443 crore in 2012-13, is consolidating its business and now has three casinos and two luxury hotel properties, Deltin Palms and Deltin Suites, in Goa. (The gambling business accounts for Rs162 crore of the revenue; real estate makes up the balance.)

Jaydev Mody: The Measured Gambler
Image: Vikas Khot
Mody with wife Zia, one of India’s most successful corporate attorneys, and their three daughters

Mumbai’s ‘big bull’ Rakesh Jhunjhunwala was an early investor in the company. Known in the bourses for his savvy investment timing, Jhunjhunwala entered when Delta Corp was looking for a private equity investor; his syndicate owns about 10 percent of Delta Corp.  He and Mody are now friends and even own horses together. Mody describes the market man as a “controlled gambler”.

Stock market analysts expect the next boost for the company to come from its new casino-hotel in Daman. Delta has invested Rs 400 crore in the property, a 176-room hotel with an in-house casino spread over 60,000 feet. They are awaiting 5-star certification, a pre-requisite for a gaming licence.

Daman, the Union Territory perceived as ‘sin city’ for visitors from Gujarat, could be a perfect second gaming location. When the property opens, it will reduce Delta Corp’s dependence on the Goa government’s policies.

Under pressure from groups such as Bailancho Saad, who have been campaigning against gambling, Goa chief minister Manohar Parikkar is also bringing in legislation later this year to bar Goans from visiting these casinos. (Mody says that about 95 percent of his clientele is not from Goa.)

Parrikar’s Bharatiya Janata Party government is under pressure to force the casino ships out of the Mandovi river and into the open sea. Such a move will make it more difficult for customers to reach these gambling havens, but Parrikar has promised activist groups that he will not renew licences for ships on the river.

In April this year, the income tax department raided casino companies operating in the Mandovi, including the offices of Delta Corp and Peninsula Land, where Mody is on the board of directors, as well as his residences in Mumbai and Goa. Other large casinos such as Pride, led by VM Khetrapal and its directors, were also raided. It is still not known whether anything incriminating was found.

After Goa and Daman, he is on course to expand into Sikkim and Sri Lanka where, indications are, rules may change soon.

Despite his propensity to wager on almost any outcome—he has Rs 3 lakh riding on the Lok Sabha elections (with friends, of course) and he bet with us on the outcome of an IPL match that evening (he lost!)—Mody says he does not make reckless decisions in business. “I can never play blind,” he says referring to the Indian game of flush (teen patti), where players place bets after seeing only a few cards. “It’s probably my middle-class upbringing.”

He started working when he was 16, shortly after his father passed away. “My dad had left us almost nothing, and I had to get a job immediately after college. I was very hung up about money. I wanted to make lots of it.” He entered the real estate trading business in Baroda, with his mother’s ancestral property; which he redeveloped and later sold. By the time he was 25, he had started a small factory in Nashik to make printed labels. He christened the business Arrow Webtex, and continues to hold a majority stake in what is now called Arrow Textiles.

In the mid-1990s, he got his chance to play in the big leagues when he began redeveloping mill property with Ajay Piramal, a fellow amateur rider at the Turf Club. Mody’s sister Urvi had married Ajay’s oldest brother and then-chairman of the Piramal Group, Ashok. The Piramal family owned Morarjee Mills, one of the largest old mills in the city. After Ashok Piramal’s untimely death in 1982, there were very few people whom Ajay trusted, Mody says. “We started Peninsula Land from a small office and one peon,” he says.

Jaydev Mody: The Measured Gambler
Image: Vikas Khot
The 58-year-old at his house in Nerul, Goa

Over the next 15 years, the duo were among the pioneers responsible for the transformation of central Mumbai’s crumbling mills district. In 1999, they opened the city’s first mall, Crossroads (now Sobo Central), at Tardeo; their Peninsula Corporate Park was the first from-the-ground-up redevelopment into an office complex in the area, which has morphed into a gentrified commercial and residential neighbourhood.

By 2005, things began to change for the partnership. The Piramal family split, carving up their business rather acrimoniously. Urvi’s three sons had grown up and were ready to take over at Peninsula Land. Ajay and his family took up a larger share of the pharma arm of the business. Mody, 50 at the time, decided to cash out and handed over the reins to the next generation of Piramals. However, he continues to be a director on the board of Peninsula Land.

“For two years after this, it was like I had retired. I spent time looking after my three daughters who were growing up, and sorting out my investments.” He had obviously not stopped evaluating options, and began investing in construction and real estate in east Africa.

After a chance meeting at a party, Reliance Industries Chairman Mukesh Ambani decided to make a personal investment in the venture. Most of the work involved construction in Kenya, where Mody is still invested in a limited way.

In the course of business travel, his fondness for the tables often led him to casinos in Nairobi and Goa. Over time, he began to sense a big opportunity and, in gambling argot, he decided to go “all-in”. He formed Delta Corp, and began unwinding his real estate investments to channelise his resources into the new venture.
Jaydev Mody’s rise reads like a series of calculated but audacious bets by a gambler unafraid to raise the pot, and always knowing when to walk away, when to change the game.

But in one respect at least, he chose early and stayed with his decision. His wife, Zia, is Mody’s childhood sweetheart; they grew up in the same locality in south Mumbai and rode together at the Turf Club. “I was a better rider, but he never stopped trying to impress me,” Zia Mody, one of India’s most successful corporate attorneys, told us.

Zia is a Baha’i and her faith forbids smoking, drinking and gambling. “I would never participate in this business,” she says. “But racing is his passion, and his relaxation time with his buddies. I use the time to catch up on my work.”

Zia says she is blessed to have a best friend for a husband. Which is why she does make the occasional trip to the races when her husband thinks his horses have a chance at winning.

Betting isn’t the only thing they differ on. They argue about music, whether at home or while travelling. Mody, once a drummer in a band, prefers Crosby, Stills & Nash and Jethro Tull. Zia, on the other hand, is steeped in western classical “like a good baawi”, and would rather have something more soothing. “Beatles and Crosby I can take but Pink Floyd drives me mad,” she says.

Their oldest daugher, 28-year-old Anjali, agrees that her parents are contrasting personalities in many ways.  “It is said that behind every successful man is a woman—I’d say behind my very successful mum is my dad. He is incredibly close to us and used to look after us when mum was busy.”

Zia, a veteran of many corporate battles, insists that their disagreements have reduced over the years. “We don’t argue for more than five minutes these days—there is a much broadened sense of mutual tolerance,” she says, laughing that “after 30 years, I know that I can’t change him”.

(This story appears in the May-June 2014 issue of ForbesLife India. To visit our Archives, click here.)