The state-controlled Philippines Amusement and Gaming Corp. (Pagcor) has ordered the Leisure & Resorts World Corp. (LWRC) to immediately shut down 53 Bingo Bonanza and electronic games sites operated by subsidiaries.
Pagcor cited the non-compliance of electronic bingo operator AB Leisure Exponent Inc. (Able) and e-games operator Total Gamezone Extreme Inc. (TGXI) to the distance restriction guidelines of the government, which wants gaming outlets to be at least 200 meters away from schools and churches.
Some 36 e-bingo sites of Able and 17 sites of TGXI were ordered by Pagcor to cease operations immediately.
For Able, more popularly known as Bingo Bonanza Corp., the affected sites represented around 27 percent of 134 bingo parlors under the network.
TGXI, on the other hand, is the assignee and purchaser of the assets, rights and interests of Digiwave Solutions Inc. (DSI), the operator and licensee of Pagcor’s e-games stations.
“LRWC will send a letter of reconsideration to Pagcor. Should reconsideration be not given, we will transfer the electronic bingo operations at said sites and transfer the same to compliant locations,” LWRC said.
Asked by the Philippine Stock Exchange about the impact of the immediate closure of these 53 outlets, LWRC said.
Revenues and net income foregone up to the end of 2016 for the affected sites are estimated to be P477 million for Able and P56.2 million for TGXI, the company estimated based on earnings trends seen in the first seven months of 2016.
“These numbers approximate 5 percent of total consolidated 2015 revenues and net income of the LRWC Group,” the disclosure said.
Hardly affected by Pagcor’s order, shares of LWRC even slightly increased by 0.25 percent to close at P4.01 per share on Friday. This gave the company a market capitalization of around P4.8 billion.
The related operating assets of the affected sites amounted to P190 million as of end-July, the company said.
LRWC said it would send the letter of reconsideration to Pagcor not later than Sept. 13.
“We will still wait for the Pagcor’s reply to our request for reconsideration before we could set our timetable for the resumption of operations of the affected sites,” the company said.
This year, Able plans to expand by applying for permits to open new bingo boutiques in high traffic areas around new SM and Robinson’s Malls and Supercenters as well as bingo outlets in Metro Manila and select provincial areas. TGXI had also been wanting to expand its retail market reach by acquiring more strategically located venues and offering better games to attract more players and increase customer spent.
Aside from Able and TGXI, the group likewise has a 69.68 percent interest in First Cagayan Leisure and Resort Corp., which has an existing license agreement with the Cagayan Economic Zone Authority to develop, operate and conduct internet and gaming enterprises and facilities in the Cagayan Special Economic Zone Free Port. It also has a stake in Midas Hotel and Casino.