After the government of Philippines’ anticipated a great oversight the previous year, the country’s leading online gambling licensing body faced immense loses by losing nearly half its licenses.
Francis Hernando, who is the chief operating officer of Leisure and Resorts World Corp (LRWC) which is Philippine’s gaming operator, gave a statement to Philippine Star that almost half of the online gambling licenses owned by First Cagayan Leisure and Resort Corp has been lost since Philippine Offshore Gaming Operator (POGO) program was introduced the previous year by Philippine Amusement and Gaming Corporation (PAGCOR).
LRWC has been a market leader in Philippine’s retail gaming market. It provides various services like multi-gaming platforms and other numerous games and products along with a solid and robust distribution network in its neighbourhood sites of entertainment facilities.
As mentioned by Hernando, the number of licenses help by First Cagayan was 138 last year, and it has dropped below 80 this year. Hernando stated that they have lost 60 licenses, the 60 which was transferred to POGO. The rate at which the number of licenses has dropped is also increasing, according to LRWC.
The unfortunate circumstances have taken place due to the anti-online gambling campaign initiated by Philippine’s President, Rodrigo Duterte. The withdrawal of licensees started minutes after he took office last summer. Cagayan Economic Zone Authority (CEZA) dominated the Asian-facing Philippine online gambling industry until the unfavourable changes took place.
Operators who owned a CEZA license were always at a risky position, however, this risky position was getting even riskier by the day. It seems difficult to project Duterte’s intentions, nonetheless, CEZA operators are aware that they might fall under examination at any moment.
Letters were issued in January by Hernando, to the online licensees requesting them not to withdraw their licenses and also assuring them to add an investment of $7 million in order to upgrade the infamously inadequate infrastructure in the Cagayan Special Economic Zone and Freeport.
However, these requests were all in vain. Nonetheless, Hernando claimed that the operations were going to commence in Freeport by a ‘Macau-based gaming company’.
First Cagayan Leisure and Resort Corporation’s strategy to retain its online gambling licensees includes spending millions to upgrade its technical infrastructure in the hope of saving its business, but all these efforts might be in futile
Due to the rapidly depleting business of First Cagayan, the business will face immense pressure to find alternative resources in order to maintain or increase the revenue. Reynaldo Bantung, the chairman of LRWC stated that the company expects to introduce 20 further eBingo retail operations apart from the 186 venues it presently holds by the end of the year.
Some of the upgrades by LRWC of the Cagayan Economic Zone involves the development of the Cagayan North International Airport. This will help them to accommodate the jets of external operators who bring in the VIP guests for gambling in the casinos at the Economic Zone.
The loss of licenses by First Cagayan has definitely proved beneficial for PAGCOR’s POGO and helped them earn a revenue of $21.7m in the first half of 2017, however, it’s still a fraction of the total revenue earned by the state-owned gaming operator, which amounts up to $559 during the same time. PAGCOR anticipates a rise in revenue up to $120m a year by POGO when the program is fully introduced.
First Cagayan is expecting its new plan to help them retain a good portion of its current licensees and hopefully attracted some other operators who have not yet managed to score a PAGCOR POGO license.