By Andreo Calonzo
Two online casino operators that cater mostly to Chinese clients are exiting the Philippines, and more will likely follow suit due to virus curbs and taxes, the Philippine gaming agency said. Casino and property stocks fell.
More than 5,000 employees, mostly foreign nationals, will lose their jobs after Don Tences Asian Services Solutions and SC World Development Group Ltd. asked that their licenses be canceled, said Philippine Amusement and Gaming Corp. Assistant Vice President Jose Tria.
“There are more to come. We are doing our best to convince them to stay,” Tria said in a mobile-phone message.
Bloomberry Resorts Corp. sank as much as 9%, leading declines among Philippine casino operators that provide gaming rooms for online gambling operators while Suntrust Home Developers Inc., 51% owned by Suncity Group Holdings unit Fortune Noble and which is building a casino resort in Manila, tumbled as much 7.5%. Megaworld Corp. dropped as much as 5.3%, pacing a retreat among builders of residential and office condominiums.
“Continued withdrawal by online gaming operators will hurt prospects of casino companies and also developers because this is a key market for residences and offices,” says Astro del Castillo, managing director at First Grade Finance.
Tria said steps taken to stem the virus outbreak, as well as additional taxes, have affected the operations and economic viability of online casinos also known as Philippine offshore gaming operators or Pogos. These are choking what could have been a pickup in transactions amid the pandemic, he said.
“They will most likely go to countries with lesser regulatory fees and taxes to be economically viable,” the gaming agency official said.
Congress is looking at proposals to slap a 5% franchise tax on gross revenue or receipts derived from online casinos’ operations, and to impose 25% income tax on foreigners working in the industry.
© 2020 Bloomberg L.P.