Leisure & Resorts to venture into online gaming

Gaming and recreation concern Leisure & Resorts World Corp. is taking a shot at online gaming which has the potential to grow into a $12 billion industry next year, as it looks for a fresh source of revenue in addition to its successful bingo parlors.

LRWC chairman Roberto Atendido said the company is hoping to capitalize on the booming online gaming sector through its 35 percent stake in First Cagayan Leisure & Resorts Corp. (FCLRC), a company that provides hosting services to Internet gaming operators in the Cagayan Special Economic Zone and Free Port, one of the few jurisdictions in the Asia-Pacific region developing an Internet gaming hub.

FCLRC president Albee Benitez said the company offers a commercially attractive business model for online gaming operators to target the untapped Asian markets and international gaming community in view of the country’s competitive licensing regime, sensible regulatory framework and disciplined operator and player protection policies.

As master licensor, FCLRC recommends approval of licenses for various online games and is tasked to monitor and regulate operations of Internet gaming enterprises located in the economic zone.

Benitez said the evaluation process involves probity checking, audit trails and checking of software to ensure that all games conform with the random number generator standard as games of chance.

With the revenues for online gaming growing every year, FCLRC is confident of capturing a slice of the highly lucrative industry. An international study predicted that the Asia-Pacific region will be the largest market for Web games by 2009.

FCLRC is betting that the Philippines‚ proximity to player-rich Asian countries, high-speed and low-cost telecommunication facilities, world-class call center services would give the company the edge as a preferred base for Internet gaming operators.

As master licensor, FCLRC gets a two percent share in the gaming tax levied on operators.

Benitez said FCLRC has issued a total of 14 interactive gaming licenses. Of which seven are already operating. The seven idle licenses are expected to commence operations within the year.

He said the company is currently reviewing another 10 applications and is confident that the company will attract more online gaming operators from Japan, Taiwan, and Korea.

Meanwhile, Benitez said LRWC is expected to more than double its profits this year to P90 million - P100 million, driven by higher sales from its 35 bingo parlors. To sustain growth, the company plans to introduce new products in the market to further boost revenues.

Traditional bingo remains the company’s principal product line contributing about P2.2 billion in 2004, representing 84.3 percent of total sales and increase of 8.7 percent of P177 million over previous year’s sales.

Significant growth in sales came, however, from the company’s E-bingo operations, registering P410.4 million in sales.

By the end of June 30, 2005, LRWC had a total of 744 E-bingo machines in 21 bingo parlors compared with 642 E-bingo machines in 20 bingo parlors last year.

The company’s target for the year is to install 200 more machines in eight bingo parlors by the end of the year. It also hopes to end year with a total of 944 E-Bingo machines which are estimated to generate total sales of P634 million.