A government phase out order on China-focused Philippine Offshore Gaming Operators (POGOs) has caused collateral damage to gambling stocks such as DigiPlus Interactive, even though it is not part of the ban.
DigiPlus, one of the strongest names in the market thanks to surging online bingo revenues, slumped nearly 7 percent on Tuesday morning
It recovered during the afternoon session and finished flat by the closing bell.
“Articles following the speech qualified the directive to mean only online gaming firms that are China-centric,” Abacus Securities’ research head Nicky Franco said in a note to investors.
Buy rating
He also noted the decline in the share price ahead of President Marcos’ State of the Nation Address “may have been in anticipation of the ban”.
“[W]e don’t think it will be affected and the drop is a chance to add or initiate positions,” said Franco, who has a “Buy” rating on the stock.
Confusion
Part of the confusion stemmed from the reclassification of POGOs to Internet Gaming Licensees, or IGLs.
According to the state-run Philippine Amusement and Gaming Corp., POGOs and IGLs cater to overseas players, mainly from mainland China, but also US and European markets.
IGLs are different from online or e-games, which serve domestic players and include games such as e-bingo, sports betting, and online poker.
Miguel R. Camus has been a reporter covering various domestic business topics since 2009.