Local Berjaya unit expanding Luzon lotto operations

MANILA, Philippines - The local gaming unit of Malaysia’s Berjaya Group is expanding its operations in Luzon even as it awaits the resolution of an arbitration case.

In a regulatory filing, Philippine Gaming Management Corp. (PGMC) said it has signed an interim settlement deal with state-run Philippine Charity Sweepstakes Office (PCSO).

“Pending the resolution of the arbitration, PCSO agreed to cause PGMC to install at least 700 additional terminals in Luzon,” the company said.

In June, PGMC’s board of directors approved the filing of an arbitration against PCSO.

The subsidiary of listed Berjaya Philippines Inc. said PCSO violated the exclusivity contract after the government gaming agency allowed rival firm Pacific Online Systems Corp. to install lottery machines in Luzon.

PGMC provides computers and online lottery equipment for PCSO’s Luzon operations. It is entitled to rentals equal to a certain percentage of the gross receipts from all ticket sales of PCSO.

“Under the terms of the agreement, PGMC and PCSO agreed to resort to arbitration in order to settle issues regarding PGMC’s exclusivity in Luzon,” the company said.

PGMC claimed it lost revenues as Pacific Online installed 700 lottery machines in Luzon between July and December last year. Pacific Online facilitates PCSO’s online lottery operations in Visayas and Mindanao.

So far, PGMC has 600 to 700 lottery equipment waiting to be deployed in Luzon. Lottery sales in Luzon hit P20 billion last year, up from P18.5 billion in 2011 while operations in Visayas and Mindanao netted P9 billion in revenues.

Meanwhile, Berjaya Philippines said in a separate disclosure that its tender offer for shares in a British luxury car distributor has closed.