Threatens to sell or close PAGCOR operations
Bingo operator Leisure & Resorts World Corp. is the latest online gaming provider under attack by newly elected Philippine President Rodrigo Duterte.
The Philippine Amusement and Gaming Corp., which regulates the industry and also operates some of the country’s casinos, has announced it will not issue new permits or renew expiring permits for electronic platforms for bingo, reports Bloomberg News. Shares of Leisure World dropped 21 percent on the news for the steepest decline since 2008.
The move follows Duterte’s all-out war on PhilWeb Corp., an e-Games provided which also will not see its license renewed. PhilWeb equipped several hundred internet cafés offering games like baccarat, blackjack, slots, video poker and sports betting. Duterte called the company’s chairman and major stakeholder Roberto Ongpin “an oligarch who must be destroyed,” though Ongpin says he has never met the president. A shutdown of PhilWeb could mean the loss of 6,000 jobs.
PAGCOR Chairwoman Andrea Domingo, a Duterte appointee, says the new president is simply promoting responsible gaming in the country. “He does not want online gaming or hybrid games like this to proliferate in the country because it caters mostly to the indigent or needy people,” she said in an interview on a morning news program.
Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank Inc., told Bloomberg the upheaval may simply be the new government “overhauling and realigning the industry into something that’s more controlled and regulated by weeding out the small gaming companies.
“But over the short term,” he added, “these changes will be taken negatively, as markets by nature don’t like disruptions.”
Leisure & Resorts controls 35 percent of the Philippines’ bingo market, with more than 8,500 e-Bingo machines accounting for revenues of 9.62 billion pesos (US$207 million) in the first half of 2016.
In a last-ditch effort to save PhilWeb, Ongpin offered to hand over 49 percent of his shares to PAGCOR. When the regulator rejected his offer, he went a step further, proposing that the donated stake be used by the government to build a nationwide network of drug rehabilitation centers.
In a letter, Ongpin said he firmly supports Duterte’s campaign to end drug abuse. He added that gambling may be an undesirable activity in some people’s eyes, but drugs are deadly, and have the potential to destroy the fabric of youth and society.
In a statement, PAGCOR said the issue is not about “Roberto V. Ongpin or PhilWeb per se. It is the president’s and his government’s opposition to online and onsite gaming because of the social ills and decay they foist on our communities as they cater to the more economically vulnerable portion of our population.”
Meanwhile, online gaming licenses issued in the newest gaming jurisdiction in the Philippines—the Aurora Pacific Economic Zone and Freeport Authority—apparently have not been affected by the uproar. In an email to GGRAsia, APECO President and CEO Israel F. Maducdoc wrote, “The five online gaming licenses [so far] issued by APECO through its master licensor, Pacific Seaboard Leisure and Entertainment Corp., were not affected by the reported crackdown by the Philippine government against the country’s online gaming industry.” Unlike PhilWeb, he said, Aurora issues licenses for online gambling services aimed at players outside the country.
Reuters reports that the offshore industry may be totally acceptable to the new administration. The Philippines will issue online gaming licenses soon for operators that target overseas punters, “seeking a new revenue source after deciding not to renew permits for services used by poor Filipinos,” the news agency reported.
PAGCOR, incidentally, may soon be stripped of its role as an operator of gaming enterprises. Newly appointed Finance Secretary Carlos Dominguez said, “We believe that government should only be in regulatory functions and not in commercial functions and therefore should dispose of—by sale or closing down—the commercial functions.”
