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INTEGRATED RESORT operators may experience heightened interest as initiatives to reinforce regulation of the online gambling industry could draw players to physical casinos.
Tighter online gambling regulations might induce a change in habits among mainstream gamblers, which could enhance foot traffic and gaming activity for integrated resorts, stated DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin in a Viber communication.
“As online platform access becomes more limited, some of this interest may shift towards physical casinos, potentially benefiting integrated resorts through increased foot traffic and gaming activity from the broader market,” Mr. Tin mentioned.
Prominent integrated resort operators encompass Bloomberry Resorts Corp., which manages Solaire Resorts in Entertainment City and Quezon City, alongside Belle Corp., which serves as the landlord of the City of Dreams Manila.
Physical casinos are anticipated to remain insulated from the potential adverse effects of proposals to prohibit virtual gambling as they serve a different market segment, he noted, while the latter typically targets the mass audience.
“The ongoing regulatory push notably centers on online gambling, with minimal direct repercussions anticipated for physical casinos. These (integrated resort) operators mainly cater to the VIP (very important person) segment,” Mr. Tin stated.
“Integrated resorts and casinos have already experienced significant declines in gaming revenue post the Philippine offshore gaming operator (POGO) ban, which led to a downturn in their VIP segment. I doubt the government will impose stricter rules on physical casinos next, as it would severely impact tax revenues collected by the Philippine Amusement and Gaming Corp. (PAGCOR),” he continued.
Jayniel Carl S. Manuel, Seedbox Securities, Inc. sales and trading department assistant manager, indicated in a Viber message that the repercussions of the suggested online gambling regulations on integrated casinos will be limited and minor, although there may be some spillover from the crackdown.
Investors seeking to reallocate their capital might contemplate other companies outside the gaming sector, Mr. Manuel added.
“If investors opt to rotate their capital, I believe it would favor sectors with stronger growth prospects or more compelling stories, like banking or select conglomerates,” he noted.
“Regarding a shift in demand, I remain doubtful. Without DigiPlus Interactive Corp., which has been the main catalyst in the online gambling arena, the sector lacks the same allure.”
On Friday, gaming stocks declined. Bloomberry shares dropped by 8.72% or 41 centavos to finish at P4.29 each, while Belle stocks fell by 3.75% or six centavos to P1.54 each.
DigiPlus shares also decreased by 23.87% or P9.25 to end at P29.50 each. It operates the sports betting platform ArenaPlus, digital bingo platform BingoPlus, and online gaming platform GameZone.
Mr. Manuel expressed that the share values of integrated resort operators might rebound in the upcoming days. “It’s typical for stocks to see minor recoveries during significant downturns like this.”
In the meantime, stricter regulations might push more individuals towards underground operators rather than land-based casinos, warned China Bank Capital Corp. Managing Director Juan Paolo E. Colet.
“Many of those consumers of online gaming at risk of dropping off due to regulatory tightening are more likely to turn to underground operators than large land-based casinos,” he stated in a Viber message.
Mr. Colet urged companies within the gaming sector to continue expanding to broaden their reach and minimize the effects of policy alterations on their operations.
“The government’s evolving gaming policies and regulations will ultimately favor diversified gaming companies that possess the resources, technology, and offerings to responsibly serve as vast a market as possible,” he stated.
“Thus, it remains logical for integrated resorts to pursue their expansion into online gaming, and it would be prudent for online gaming firms to engage with the land-based casino market.”
Several lawmakers have introduced measures advocating stricter regulation of online gambling, including online betting, in response to reports of rising addiction among Filipinos.
The Finance department is also recommending a tax on online gaming, as well as exploring potential policies to limit unrestricted access to gambling, including digital platforms.
Meanwhile, the Bangko Sentral ng Pilipinas indicated it will issue a circular requiring banks and e-wallets to safeguard users of their digital platforms against risks linked with online gambling, which may involve restricting gaming access.
PAGCOR stated it is working to curb the spread of illegal online gaming operations. — Revin Mikhael D. Ochave
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