Leisure & Resorts allots P100M for expansion of bingo operations

Listed gaming firm Leisure & Resorts World Corp. (LRWC) will spend as much as P100 million this year for the expansion of its bingo operations as it seeks to further boost revenue.

LRWC president Alfredo Benitez said the company intends to put up 30 to 50 new bingo kiosks, estimated to cost between P1.8 million to P2 million each, to remain on top of the competition, serve new markets and expand customer base.

Benitez said LRWC is venturing into the smaller store operation as it has already run out of malls to locate its operations. The new kiosks, he said, will be located in high pedestrian traffic locations and will have an average area of 100 square meters.

At present, it only has one kiosk located in Greenhills.

LRWC is a holding company for gaming firms led by AB Leisure Exponent, Inc., which has a franchise to operate bingo games nationwide and is currently the largest operator in the country with an estimated market share of about 50 percent.

Benitez said the company is also rolling out 350 electronic bingo machines and 15 Rapid Bingo terminals in existing outlets. It had a total of 874 of these machines at the end of 2005.

On the other hand, LRWC’s 50.75-percent subsidiary, First Cagayan Leisure & Resort Corp., the master licensor for Internet gaming operations at the Cagayan Special Economic Zone (CESZ), intends to increase the number of locators through tie-ups with other recognized software providers.

Funding for the company’s expansion plans will come from the sale of a 3.6-percent stake at a price ranging from P1.74 to P1.84 per share.

Benitez said an agreement is expected to be reached on or before the end of the month.

First Cagayan gets half of the two-percent tax imposed by the government on gross earnings of Internet gaming operations in the special economic zone. The company has already licensed 16 operators that include Play Tech and Micro Gaming.

Online gaming operations based in the Philippines primarily cater to Asian players who account for 10 percent of the multi-billion dollar Internet-based gaming industry.

LRWC posted a net income of P64.1 million last year, or more than three times the P20.3 million reported in 2004. Gross revenues increased by 6.5 percent to P2.79 billion from P2.62 billion.

LRWC recently acquired majority control of First Cagayan through a share issuance valued at P32 million or P800 per share. The move is in line with the company’s plan to penetrate the $10-billion global online gaming industry, which is projected to double within the next three to five years, most of the growth of which will come from the Asian region.