Online sports betting technology provider Asian Logic could be one of the first companies to feel the impact of the Philippines’ president’s vow to stop online gambling.
If you’re just joining us, newly sworn-in President Rodrigo Duterte made waves last week when he used his first cabinet meeting to announce that “online gambling must stop.” In response, the Philippine Amusement and Gaming Corp (PAGCOR) announced it was temporarily freezing the issuing of new online permits.
PAGCOR’s freeze caused a 22% fall in the shares of PhilWeb Corp, which operates a network of 268 PAGCOR-licensed eGames cafés that offer online casino, video poker and lottery games. On Monday, PhilWeb sought and was granted a three-day suspension of trading in its shares. The timing could not be worse for PhilWeb, whose contract with PAGCOR is set to expire on July 11.
Duterte’s anti-online statements stressed the harm that such activities have on local residents, and therefore do not appear to have been directed at the Asian-facing online gambling companies licensed by the First Cagayan Leisure and Resort Corp under the Cagayan Economic Zone Authority (CEZA). By law, CEZA-licensed sites are prohibited from serving Philippine customers.
However, one CEZA-licensed operator could become collateral damage from Duterte’s online purge. Asian Logic, which controls the Dafabet online gambling site, has a PAGCOR-licensed retail sports betting subsidiary called MegaSportsWorld, which operates 280 retail points of sale, most of which are in PhilWeb-operated eGames cafes.
Should PAGCOR bow to Duterte’s pressure and elect not to renew PhilWeb’s contract – or choose to get out of the eGames business entirely – MegaSportsWorld’s future will be one giant question mark. The company does offer a phone betting service, but whether it’s robust enough to take up the slack remains to be seen.
Two other companies – Leisure & Resorts World Corp (LRWC) and DFNN – could also take significant hits if PAGCOR puts curbs on its eGames division. Like PhilWeb, LRWC and DFNN supply gaming products to eGames outlets, while DFNN also has a mobile lottery division and LRWC operates the Midas Hotel and Casino in Manila.