The situation in the Philippines over recent months demonstrates once again that regulation and politics are the biggest influences on the gambling sector. New president Rodrigo Duterte has been in post since 30 June 2016 but his hard-line views have already had a devastating effect on Philweb.
On 30 June 2016 Philweb’s shares were trading at 24.40. As of 8 August 2016 they are now worth just 5.13. The reason for the precipitous fall is that Philweb runs the country’s network of e-games cafes but President Duterte has stated “online gambling must stop” and Philweb’s licence to operate will seemingly not be renewed by PAGCOR, the gambling regulator, after 10 August 2016.
Philweb was originally involved in mining and exploration but got involved in internet gambling in 2002. It has certainly made a success of the e-games cafes, growing turnover from PHP 11 billion in 2005 to PHP 138 billion (US$ 3 billion) in 2014. The number of outlets has also grown over these 10 years from 37 to 305. The government has benefited from the success because Philweb has remitted more than PHP 14 billion to the government over the years it has run the cafes.
The most popular games in the cafes are online slots and baccarat, which account for 80% of gross win combined. The cafes’ games were clearly popular with players and the payout was very high at around 96%.
But all that expansion seems to have for nought. Philweb has been forced to get monthly approval to operate the cafes since Duterte’s announcement. The company’s president Dennis Valdes has stated that a non-renewal of its licence would mean “Philweb would shut down all operations. All the suppliers of e-Games, small and medium enterprises that supply goods and services to each e-Games outlet, would also suffer from the shutdown.”