6 days ago
9
Bloomberry [BLOOM 3.78, up 14.6%; 179% avgVol] [link], the Razon Family’s casino resort business, said that it is currently developing an online platform that “will compete directly with offerings from other electronic gaming license holders, including BingoPlus, the online casino brand developed by DigiPlus Interactive Group.” The news comes after the bricks-and-mortar gaming company posted a 72% drop in FY24 net income to P2.6 billion, driven by costs associated with the opening of its Solaire North location and a “one-off [Gross Receipts Tax] charge”, and comes a day after DigiPlus [PLUS 37.50, up 1.2%; 73% avgVol] posted its FY24 earnings results showing a 207% increase in net income to P12.6 billion. BLOOM has some experience with online gambling, as it was permitted to take online bets during the COVID crisis, but some analysts believe that BLOOM will need to be “very creative and aggressive to attract players” [link] due to PLUS’s established dominance in the sector.
MB bottom-line: BLOOM was the belle of the ball, right up until it wasn’t. The stock is down 67% over the past year, and while some are looking at this like a temporary dip, others are concerned about how sticky this growing preference for online betting might be, and worried about the growing competition for in-person gaming from other regional players, like Japan. Personally, I don’t know anybody that has gone to a physical casino in the past year, but nearly all of my friends have placed bets online in some form, whether it be on PLUS games or sports betting apps. I might be a little order than BLOOM’s target demographic, but my friends and I are in the right income bracket to play high-stakes poker and other games in-person. A couple of my friends did this pre-COVID, joining multi-day tournaments and dropping tons of money. But nobody has done this since COVID, and I haven’t heard of anyone even voicing the desire to do so. Online gambling is attractive to BLOOM because it is more addictive than physical gambling, reaches a wider audience, and requires way less in terms of land, headcount, and logistics to set up and maintain. Will this be a successful venture for BLOOM, or yet another example of the “We did not do this because it is easy, but because we thought it would be easy” meme?
Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.
