Malaysian investment bank Maybank has warned that the threat of a total ban on the Philippines’ domestic online gaming, or eGames, sector is real given that political noise is similar to before recent bans on eSabong and POGOs.
While Maybank stressed that tighter regulations rather than an outright ban appears to be the “more sensible” choice, local analyst Raffy Mendoza observed in a Friday note that a ban was still very possible. As such, considerable uncertainty continues to surround the eGames industry and is weighing down the stocks of those companies involved.
More clarity is expected following President Ferdinand Marcos Jr’s State of the Nation Address (SONA) on Monday – which will also happen to represent one year since the President first announced the ban on POGOs.
“While data regarding the negative impact of eGames in the Philippines remains opaque, it is still plausible that online gambling may be banned as the political noise is reminiscent of how eSabong and POGOs were dealt with,” Mendoza wrote.
“In our view, we believe that regulation over an outright ban remains to be the more sensible route.”
Maybank highlighted the importance of the eGames sector – which booked 27% year-on-year growth in Q1 – to the Philippines economy by pointing out that it contributed about 0.68% to the country’s nominal GDP in the first quarter, much higher compared to the 0.04%-0.30% range of developed markets around the world which have legal online gambling, such as Australia, Canada, the UK and USA.
It is therefore no surprise that talk of a total ban has impacted investor sentiment, with leading eGames provider DigiPlus Interactive Corp seeing its shares plummet by as much as 79% from their peak.
Maybank has also downgraded Bloomberry Resorts Corp – which recently launched its MegaFUNalo into the market – from “Positive” to “Neutral” due to ongoing uncertainty.
“We anticipate that President Marcos Jr’s SONA on July 28 will provide that clarity,” the bank said.
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