Philippine gaming company DigiPlus Interactive Corp. has pulled out of the final rounds of a New Zealand auction for the right to apply for an online gaming license, saying a market review informed the decision.

“After further market analysis and determination of market values, the company has decided to abstain from the final rounds of the New Zealand auction on the right to apply for an online gaming license,” DigiPlus said in a stock exchange disclosure on Wednesday.

The company said the move would not affect its existing operations or its international expansion strategy.

Auction Outcome

New Zealand's Department of Internal Affairs said the auction concluded after 10 rounds, with 11 entities securing the right to apply for 15 online casino licenses at NZ$15 million per license. Successful bidders must still undergo a detailed application and assessment process before licenses can be granted.

The auction structure capped the pool at 15 licenses and left entry pricing to competitive bidding, with each right to apply clearing at NZ$15 million before the separate application and assessment stage.

DigiPlus had entered the process in August, when its board of directors approved the filing of an expression of interest to apply for an online gaming license in New Zealand.

A More Selective Expansion Strategy

The withdrawal follows the company's earlier statements that it was taking a more selective approach to overseas expansion as it assessed regulatory conditions and competition in international markets.

In September, ArenaPlus Head Erick Su said DigiPlus was evaluating potential markets based on their regulatory environment and compatibility with the company's capabilities.

“Previously, our plan was a little bit aggressive, I would say, because we were choosing very competitive market like Brazil. We chose South Africa because of its good potential,” Mr. Su told reporters at the time.

Brazil Operations and Regulatory Developments

DigiPlus has launched operations in Brazil, where it operates under the BingoPlus brand. On Sept. 28, the company said it was assessing the implications of a provisional measure issued by Brazilian President Luiz Inácio Lula da Silva prohibiting the operation, offering, intermediation, and advertising of fixed-odds betting and online gaming activities.

The measure, which took effect upon publication, remained subject to approval by the Brazilian Congress within the prescribed period, which could extend to 120 days, a regulatory timeline that now frames the outlook for the overseas market where the company currently operates.

“Based on the company's assessment as of this date, the provisional measure is not expected to have a material impact on the company's financial condition or results of operations,” DigiPlus said in a disclosure, adding that it would continue monitoring regulatory developments in the country.

In South Africa, DigiPlus has obtained a gaming license and is preparing to launch operations, which it is targeting for 2027. The company has also been exploring opportunities in other African markets, according to Mr. Su.

S&P Flags Margin Pressure

Separately, S&P Global Ratings said in September that DigiPlus could face pressure on its profit margins over the next two years as higher customer acquisition and retention costs offset the effects of lower gaming taxes and cost savings.

The debt watcher projected the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) margin at 14.5%-16% in 2026 and 2027, compared with an average of about 18% in 2024 and 2025.

S&P also projected DigiPlus' revenue to decline to P70.25 billion in 2026 from P84.17 billion in 2025 before recovering to P82.05 billion in 2027. The ratings agency estimated that the company's new businesses, including overseas operations and planned land-based gaming activities in the Philippines, could account for 10%-20% of revenue and EBITDA by 2027.

In the Philippines, DigiPlus operates digital gaming and entertainment platforms, including BingoPlus, ArenaPlus, and GameZone.

Shares in DigiPlus rose by 10 centavos, or 1.37%, to close at P7.40 apiece on Wednesday.

— Ashley Erika O. Jose

Source: BusinessWorld