By Revin Mikhael D. Ochave, Reporter
SHARES OF TANCO-LED DigiPlus Interactive Corp. jumped on Tuesday after President Ferdinand R. Marcos, Jr. made no mention of online gambling in his fourth State of the Nation Address (SONA), which analysts said can have eased investor concerns a couple of possible ban.
DigiPlus shares closed higher by 11.06%, or P3.55, to P35.65 apiece on Tuesday. The corporate operates the gaming platforms BingoPlus, ArenaPlus, and GameZone.
Nevertheless, analysts warned that the stock could face volatility amid ongoing discussions on stricter online gambling regulations.
“It seems the market is taking a ‘no news is nice news’ stance, with investors assuming that the shortage of mention in the course of the SONA signifies that a full ban will not be forthcoming. Nevertheless, we still imagine that tighter regulation for the sector is inevitable,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.
During his SONA on Monday, Mr. Marcos covered economic growth, food security, energy reforms, and social services, but didn’t mention laws looking for to outlaw or higher regulate online gaming.
Bills looking for to either ban or regulate online gambling have been filed within the Senate and House of Representatives, citing concerns over its social impact.
Online gambling operators like DigiPlus have advocated for stricter regulation moderately than a complete ban, arguing that proper oversight would help deter players from shifting to unregulated or illicit platforms.
“This implies that proposed restrictions on online gambling will not be priority laws and, if pursued in any respect, may face an extended and unsure path to enactment after extensive revisions and debate,” DragonFi Securities, Inc. Equity Research Analyst Jarrod Leighton M. Tin said in a Viber message.
China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message that the omission bodes well for DigiPlus despite the proposed stricter online gambling regulations.
“The immediate post-SONA market response has been positive for online gaming stocks, especially DigiPlus. It’s exercise in prudence by the President to offer legislators, regulators, and stakeholders the chance to succeed in an appropriate resolution,” he said.
“At this point, essentially the most reasonable end result could be an enhanced but economically sensible regulatory environment for legitimate digital gambling. Major players that may ensure compliant operations stand to learn essentially the most from a balanced gaming landscape,” he added.
Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said that mentioning stricter online gambling controls in the course of the SONA could have sent the mistaken signal to investors and stakeholders.
“This omission seems intentional. It’s possible that the President continues to be weighing economic considerations, as online gambling continues to generate substantial revenue for each the Philippine Amusement and Gaming Corp. and the federal government,” she said.
Despite the omission, Mr. Garcia projected continued volatility in gaming stocks reminiscent of DigiPlus until there’s a clearer policy direction on online gambling.
“No mention of a web-based gambling ban within the SONA doesn’t mean it’s not being considered, and calls for tighter regulation are too loud for the establishment to be maintained. So even when there isn’t a outright ban, tighter restrictions will certainly hamper future growth,” he said.
“Without more details to work with, the market will proceed to take a position, which may lead to wild swings. Even after more details turn out to be available, it would take a while for prices to calm down as investors try and price in the consequences,” he added.
Ms. Estacio-Cruz said investors should remain cautious about gaming stocks amid the regulatory uncertainty.
“We imagine investors should remain cautious until we see final word from the federal government,” she said.
“Unicapital Securities Research still has a neutral rating on gaming stocks resulting from regulatory risks,” she added.