SEC okays capital hike for Pacific Online unit

MANILA, Philippines - The Securities and Exchange Commission (SEC) has approved the application Lucky Circle Corp. (LCC), a wholly owned subsidiary of Pacific Online Systems Corp., for an increase in its authorized capital from P4 million to P500 million.

Out of the increased authorized capital stock, P124 million was subscribed by Pacific Online, out of which P31 million has been paid in cash.

Officials said this development is in line with the thrust of the company to recapitalize its subsidiary to keep pace with its expansion plans.

Situated in major malls and supermarkets, LCC retains its leadership in the distribution, marketing and selling of instant and lotto tickets by continuous expansion and quality of service to the public, Pacific Online chief financial officer Rhederick Inciong said.

LCC  currently has 112 stores nationwide and plans to open at least 20 more outlets within the year.

Pacific Online is engaged in the development, design and management of online computer systems, terminals and software for the Philippine gaming industry. It brokers technology from global suppliers of integrated gaming systems and leases to the Philippine Charity Sweepstakes Office (PCSO) the equipment needed for its online lottery operations in the Visayas-Mindanao regions.

In addition to its core gaming operations, Pacific Online also has an investment in Innovative Solutions Consultancy Group (Synergy), a joint stock company incorporated to manage enterprises engaged in the gaming business. Synergy’s subsidiary is Total Gaming Technologies, Inc., a domestic firm founded to develop new games for the Philippine gaming industry and to provide consultancy service and equipment to the local gaming operators.

In 2007, Pacific Online, through its subsidiary Loto Pacific Leisure Corp., acquired LCC, a company engaging in retail sales for PCSO products, principally operating at SM malls nationwide.

Effective Dec. 31, 2009 and for a period of seven years, Pacific Online will be undertaking the printing, distribution, and sale of scratch tickets at no cost to PCSO and with a guaranteed remittance of P750 million for every 500 million tickets printed and sold.

The company estimates that the gaming market in the Philippines is worth over P100 billion a year, and illegal gambling accounts for half of the country’s gaming industry revenues.

In 2009, it posted a 101 percent increase in its net income to P263.4 million from P167.7 million the previous year. It plans to roll out 2,000 wagering terminals by the third quarter of 2010 by way of a finance lease and to penetrate identified untapped areas.  The PCSO also plans to increase the draw frequency of lotto and digit games and to introduce new games, a development which Pacific Online considers as new opportunities.

Officials also noted that the “instant games” business is one of the fastest growing segments of the worldwide gaming industry today, and the company seeks to take advantage of this area of growth in the industry where it operates.

The company also aims to meet at least P1.5 billion instant ticket sales this year from P1 billion tickets in 2009. To realize this, it plans to print and distribute at least 20 game variants or 100 million tickets, reinforce sales and distribution manpower complement, and to implement automated point of sales system.

Meanwhile, it subsidiary Total Gaming Technologies Inc. (TGTI) aims to increase rollout to 300 nationwide from the present 102 Keno terminal stations.