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[Photo of Internet shop]Internet casino cafés have only recently appeared in the Philippines; but they're making up for that by shooting up all over the country

“Filipinos like Internet cafés.”

Dennis Valdes, president of PhilWeb Corporation, credits this for the increasing success of PhilWeb's online casino enterprise.

Setting up shop in January 2000, PhilWeb Corporation is the first and largest Internet company on the Philippine Stock Exchange with 21 billion pesos in market capitalization.

In the first quarter of the year, the company posted a profit of 150 million pesos. The company is the dominant technology-based gaming company, catering to more than 50,000 customers a day through its huge network of online shops, sports betting stations, and mobile game services.

As a service provider to the Philippine Amusement and Gaming Corporation (Pagcor), PhilWeb has been growing because of the continued development of Pagcor e-Games (PEGS) cafés. There already are 177 PEGS cafés all over the country and PhilWeb owns 15 of them. Valdes seems to be a man who knows how to play his cards right.

On a daily basis, a casino café has around 150 players. Some of the gamblers are Korean, but Filipinos are in the majority, says Valdes, speaking at a recent Anvil Business Club forum.

He points out that one of the factors for the success of the business is the Filipinos' penchant for buying retail. “Tingi (retail) makes sense,” he says, citing how Filipinos prefer spending their money at Internet cafés rather than buying their own computers. “Why spend so much when you can only pay less for what you need?”

Valdes says another good indicator is the growing number of Internet shops in malls. Not everyone has an Internet connection, let alone a computer at home, so the convenience provided by an Net café appeals to Filipinos. Online casinos offer the same convenience and are proving just as popular.

“As far as the average casino café is involved, there are around 140 games,” Valdes discloses. The selection of games in each PEGS café includes favorites like baccarat, blackjack, roulette, and slots. Philippine law allows online gambling, but bars people below age 21 from playing. Identification cards are issued when users register, which means minors will find it hard to gain access to a PEGS café.

But not all games are available at PEGS cafés. Poker, although a popular card game, is not on the menu. “Pagcor does not allow multi-player games because of collusion,” Valdes says. In a game of virtual poker, there is no guarantee that opponents are not working together.

Pagcor does not charge investors any upfront franchise fees, but setting one up will cost some 2.5 million pesos, he says. He adds that most PEGS cafés pay off the initial investment in 10 months to a year.

While a casino café may be a promising venture, Valdes advises potential investors to make getting a mayor's permit their priority. Local zoning laws may not allow them, and Pagcor doesn't allow PEGS cafés less than 200 meters away from schools and churches.

Valdes adds that PhilWeb expected slow expansion because of the election campaign season, but daily player statistics and total bet volume have increased by 68% compared to last year.

Aside from the PEGS cafés, PhilWeb's other enterprises include Basketball Jackpot, available through its network of 185 Internet Sports Betting Station (ISBS), and Bid Wars, a text-based reverse auction.

The company recently entered a partnership with online sports betting service MegaSportsWorld to allow users to place their bets at PEGS and ISBS outlets.

PhilWeb's gaming success does not end at our borders. The company has been planning to expand overseas. Cambodia, Laos, and Vietnam are just some of the target locations, and they are already working to secure the necessary business licenses.

Games of chance are deeply embedded in Filipino culture, and PhilWeb is confident that 2010 will be another defining period in the company's success. Wanna bet?

Print ed: 06/10


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