LRWC loses 60 out of 138 online gaming operators

Due to Pagcor’s tightening

MANILA, Philippines - Leisure and Resorts World Corp. (LRWC), the listed gaming company founded by Negros Occidental Rep. Alfredo “Albee” Benitez, has lost around 60 online gaming companies under its First Cagayan Leisure and Resort Corp. in Cagayan since Pagcor tightened the noose on the industry.

The company had 138 locators as of last year but now has roughly 70 to 80 locators, or a decline of almost 50 percent.

“We lost about 60. Those 60 transferred to POGO,” said Francis Hernando, LRWC chief operating officer.

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 on gambling, effectively purging these international online sites licensed by First Cagayan.

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

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

To cope with the challenges, LRWC is redeveloping its 10-hectare sprawling cyber estate within the Cayagan economic zone to attract new locators and has been succeeding. A Macau-based gaming company is set to start operating in October, occupying a 2,500 square meter BPO building within the area.

Aside from redeveloping the Cagayan economic zone, LRWC, in partnership with the Cagayan Economic Zone Authority (CEZA), is also developing the Cagayan North International Airport in a P5 billion project, to be able to handle commercial flights and accommodate the private jets of junket players.

Junket players are targeted for the brick and mortar casinos in the economic zone.

“We now have to look for a new market. We have to convince those that are not yet in CEZA to come,” Hernando said.

Hernando said together with CEZA and other private sector members, LRWC is working to have the airport become operational as early as this year. Construction to extend the runway to be able to accommodate bigger planes is ongoing, Hernando said.

“We have no choice but to start putting in investments in Cagayan. An international airport is key,” he said.

LRWC’s operations in the Cagayan economic zone have been going on for 10 years until POGO happened. These Cagayan-based online gaming sites were outside the jurisdiction of Pagcor but the gaming regulator found a loophole because the locators operated back-end services outside the economic zone.

“This situation pushed us to develop Cagayan. Now, we have to think township. We have to have office buildings for the BPOs. We’re re-launching this thing,” Hernando said.

Under POGO rules, offshore gaming is conducted via internet using a network and software to be offered exclusively to offshore authorized players who have registered and established an online gaming account with the licensee.

Only foreigners based in another country are authorized to play while foreign nationals in the Philippines and Filipinos residing abroad are not allowed to take part in the online gaming activity, according to the POGO rules.

Pagcor has already issued 35 offshore gaming licenses under the POGO regime.

LRWC’s online business under First Cagayan, accounts for 40 percent of its business. Its other gaming-related business groups include retail, which is in charge of bingo games and eCasino operations; the hotel and casino and property.

LRWC chairman and president Reynaldo Bantug said the company remains positive on the prospects of business. It is still on track to have some 20 bingo sites by the end of the year.

“When 2017 started, it was chaotic but slowly, we are regaining previous levels,” Bantug said.