The PhilWeb Corporation has been granted a “provisional license” by the Philippines Amusement and Gaming Corp. (PAGCOR) to resume its electronic gaming operations in the Southeast Asian country.
The issuance comes a little more than a year after PAGCOR revoked PhilWeb’s gaming privileges after newly sworn in President Rodrigo Duterte deemed the company’s founder Roberto Ongpin an “oligarch” who “must be destroyed.” The billionaire has since sold his majority stake to businessman Gregorio “Greggy” Araneta III, and the new ownership is apparently in good graces with PAGCOR.
Araneta’s wife is the daughter of former Philippines President Ferdinand Marcos.
“We are grateful to PAGCOR Chair Domingo (Andrea Domingo) and the entire board of directors for their faith in our company and giving us the opportunity to deliver services to electronic gaming operators once again,” PhilWeb President Dennis Valdes stated.
Traded on the Philippine Stock Exchange, PhilWeb shares naturally jumped on the news. The company saw its stock value increase by more than 17 percent.
Ready for Business
PhilWeb provides electronic internet gambling machines for cafes around the country. Before its license was revoked in August of last year, the company managed operations at roughly 300 locations. Most of the cafes were independently owned.
When Duterte took office, his first item of business was to rid the country of anything that might be detrimental to society. His primary target was the underground drug trade, but gambling got tied in as well, though he later eased his position due to an inadequate number of law enforcement officials.
Under his predecessor, the total number of authorized electronic gaming machines went from 2,160 in 2010 to almost 18,000 before Duterte took office.
Duterte opined that Ongpin was growing his fortune by taking money out of the pockets of the general public. But after realizing the government was no longer reaping the financial tax rewards of allowing such gaming, Duterte’s administration walked back on its hardline stance. PhilWeb paid P2.1 billion ($41 million) to PAGCOR in 2015.
In addition to allowing e-cafes to resume business, PAGCOR is also selling its state-owned casinos and gaming facilities to privatize the market.
Ongpin’s Big Loss
The biggest loser in the PhilWeb story is its founder. Ongpin quickly sold his stake in the company last year in an effort to keep the company afloat and protect thousands of jobs.
He eventually struck a deal with Araneta in October 2016, selling 771.7 million shares, or almost 54 percent of PhilWeb, for about $40 million. Ongpin was looking to sell it for as much as $400 million.
Ongpin sold his stake at a valuation of just P2.60 per share, a heavy discount on what it was going for on the exchange at the time (P6.22).
On Tuesday, PhilWeb stock jumped 1.63 Philippine pesos. With 771.7 million shares, that equates to a single-day profit of $23,151,000 for Araneta.
PhilWeb closed at P11.12, meaning Araneta’s stock valuation has swollen almost 330 percent in just 10 months.