Philippines-based Leisure and Resorts World Corp – which has several interests in the land-based and online gambling sectors – reported group-wide 2016 consolidated revenue of PHP11.17 billion (US$225.0 million), up by 17.4 percent in year-on-year terms.
Consolidated net income stood at PHP1.06 billion, a year-on-year increase of 2.4 percent, the firm said in a Tuesday filing to the Philippine Stock Exchange.
“In spite of the slowdown in the gaming sector, Leisure and Resorts World Corp’s core businesses continue to show very robust growth and management believes in being able to continue this in the future,” the firm said in a press release.
But the firm gave words of caution regarding “dramatic changes in the regulatory environment particularly in the last quarter of 2016 which affected the operations of the company’s subsidiaries”. That was a reference to the September announcement by state-owned regulator cum casino operator Philippine Amusement and Gaming Corp (Pagcor) that it would start issuing new licences for offshore gaming.
Leisure and Resorts World Corp’s online division includes the majority-owned First Cagayan Leisure and Resorts Corp. The latter is the master licensor for online gaming in the Cagayan Freeport and Special Economic Zone. First Cagayan generated net income of PHP555 million in 2016, up by 19.6 percent in year-on-year terms.
“Going forward, the company assumes that First Cagayan’s revenues will be affected by Pagcor’s adoption of the ‘Rules and Regulations for Philippine Offshore Gaming Operations’ on September 1, 2016,” Leisure and Resorts World Corp said.
The group has several other online gaming-related interests. The company – via a subsidiary – also manages bingo halls and similar outlets.
Net income contribution by the casino division of Leisure and Resorts World Corp – which includes the Midas Hotel and Casino in the Philippine capital Manila – doubled in year-on-year terms in 2016. It stood at PHP170 million for full-year 2016 compared to PHP85 million a year before.
Leisure and Resorts World Corp’s casino division has three units. They are: Prime Investment Korean Inc, engaged in junket operations including phone betting at Midas’ casino; Blue Chip Gaming and Leisure Corp, a “facilities provider” of VIP slot arcades for Pagcor; and Hotel Enterprises Philippines Inc, a joint venture with another party, and which owns the Midas Hotel and Casino.
Leisure and Resorts World Corp said the increase in contribution to group net income – as provided by its casino division – was related to the input from Blue Chip, which stood at PHP106 million. “This was up by PHP92 million (+665 percent) from 2015 largely on account of the full year income of newly-acquired sites that operated for six months only last year,” the firm stated.
Conversely, net income recorded by Prime Investment Korean was PHP19 million in 2016 compared to PHP33 million in 2015. Leisure and Resorts World Corp said revenue at the junket operation “was affected by the events leading to [sic] the Bangladesh bank heist”. The latter was a reference to an online theft – estimated by the authorities at US$81 million – from the Bank of Bangladesh in February 2016. The firm did not further elaborate on that topic.
According to testimony – attributed by local media to the country’s Anti-Money Laundering Council and given at a Philippines Senate hearing in March 2016 – of the US$81 million in stolen funds relating to the bank heist, US$63 million allegedly found its way collectively, via a number of domestic transactions, into the Midas Hotel and Casino, and Solaire Resort and Casino in Entertainment City, Manila, a property developed and operated by Bloomberry Resorts Corp. There most of that cash was exchanged for gaming chips, at which point the money trail went cold, it was said during the hearings.
Leisure and Resorts World Corp was until recently an investor in casino resort City of Dreams Manila via wholly-owned subsidiary AB Leisure Global Inc. The latter generated net income of PHP270 million in 2016, Leisure and Resorts World Corp said in its Tuesday release.
The firm noted that in November last year, it signed an agreement with Belle Corp to sell its economic interest in City of Dreams Manila effective from the end of last month, for PHP5.09 billion.
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Lionel Leong Vai Tac
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