LRWC H1 profit down 40%

The Philippine Star - - BUSINESS - By IRIS GON­ZA­LES

Leisure and Re­sorts World Corp. saw its first half in­come nearly halved to P362 mil­lion, down 40 per­cent year-on-year.

The com­pany lost around 60 on­line gam­ing com­pa­nies un­der its First Ca­gayan Leisure and Re­sort Corp. (FCLRC) in Ca­gayan since reg­u­la­tor Philip­pine Amuse­ment and Gam­ing Corp. (Pag­cor) tight­ened its noose on the in­dus­try.

FCLRC re­ported lower in­come be­cause of the de­cline in host­ing fees.

“The changes in the reg­u­la­tory en­vi­ron­ment par­tic­u­larly in the last quar­ter of 2016 lead­ing to the first half of 2017 af­fected sig­nif­i­cantly FCLRC’s busi­ness and partly the re­tail busi­ness units as well,” it said in a reg­u­la­tory fil­ing.

Ex­clud­ing the ef­fects of the drop in FCLRC’s rev­enues, first half net in­come grew 10 per­cent, com­ing from the busi­ness units un­der the casino and prop­erty di­vi­sions which more than cov­ered for the short­fall in its re­tail divi­sion.

For the se­cond quar­ter alone, LRWC’s net in­come de­clined 72 per­cent to P88 mil­lion.

“De­cline dur­ing the quar­ter is at­trib­ut­able to the sig­nif­i­cant loss of First Ca­gayan rev­enues when Pag­cor is­sued POGO li­censes,” LRWC said.

The de­cline was also at­trib­uted to the de­cline ex­pe­ri­enced by sub­sidiary AB Leisure Ex­po­nent Inc. due to chal­lenges in the reg­u­la­tory en­vi­ron­ment.

POGO or the Philip­pine Off­shore Gam­ing Op­er­a­tion (POGO) is the off­shore gam­ing rolled out by Pag­cor last year as part of the Duterte ad­min­is­tra­tion’s war against gam­bling, ef­fec­tively purg­ing these in­ter­na­tional on­line sites li­censed by First Ca­gayan.

Prior to POGO, LRWC sub­sidiary First Ca­gayan is­sued the li­censes for these in­ter­na­tional on­line gam­ing sites that op­er­ate in­side the Ca­gayan eco­nomic zone.

These lo­ca­tors are like BPOs but with gam­ing ap­pli­ca­tions and they have back-end op­er­a­tions out­side Ca­gayan. Some of these back-end op­er­a­tions are in­side the Rizal Com­mer­cial Bank­ing Corp. Tower in Makati.

On­line gam­ing com­pa­nies with back-end op­er­a­tions out­side the eco­nomic zone are now re­quired to get a POGO.

To cope with the chal­lenges, LRWC is re­de­vel­op­ing its 10-hectare sprawl­ing cy­ber es­tate within the Caya­gan eco­nomic zone to at­tract new lo­ca­tors. It has suc­cess­fully at­tracted a Ma­cau-based gam­ing com­pany,which is set to start op­er­at­ing in Oc­to­ber.

The casino di­vi­sions’s first half con­tri­bu­tion was P130 mil­lion, higher than the pre­vi­ous year’s P71 mil­lion.

The on­line divi­sion’s net in­come con­tri­bu­tion, on the other hand, fell 74 per­cent to P84 mil­lio while the re­tail divi­sion’s net in­come con­tri­bu­tion de­clined 44 per­cent to P123 mil­lion.

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