The Philippine gaming company is attracting more bettors but generating less revenue from them. Cost cuts have lifted margins, while a multibillion-peso investment in a Manila casino offers a new—and riskier—path to growth.
For several years, DigiPlus Interactive Corp. appeared to have found the ideal formula for the Philippine gambling market: put familiar games on a smartphone, spend aggressively to attract players and make depositing money nearly effortless.
In the first half of 2026, that formula showed signs of strain.
DigiPlus, the company behind BingoPlus, ArenaPlus and GameZone, reported ₱32.9 billion in revenue for the six months ended June 30, a 31 percent decline from a year earlier. Retail gaming revenue, which accounts for nearly all of the company’s business, fell by the same rate, to ₱32.3 billion.
The deterioration was also visible in cash generation. Net cash provided by operating activities fell to ₱4.4 billion from ₱8.8 billion a year earlier, a decline of nearly half. Although the business remained profitable and continued to generate cash, it did so at a markedly slower pace than during its explosive growth phase.
Yet the company’s results contained an apparent contradiction: As revenue continued to fall, its operating profitability improved during the second quarter.
DigiPlus generated ₱2.35 billion in operating income in the three months ended June 30, equivalent to an operating margin of about 15 percent. That was up from approximately 12.6 percent in the first quarter, when operating income was roughly ₱2.17 billion on ₱17.24 billion of revenue. The improvement occurred even as second-quarter revenue fell 9 percent sequentially, to ₱15.61 billion.
The explanation was not a return of the high-spending customer. It was restraint.
Advertising, marketing, and promotional expenses fell to ₱4.17 billion in the second quarter from ₱5.45 billion in the first quarter, a 23 percent reduction. Cost of revenue also declined by 6 percent. Those savings allowed DigiPlus to retain more of every peso wagered on its platforms, even as the total revenue flowing through them continued to shrink.
The result was a company becoming more efficient at managing a smaller pool of revenue.
More Bettors, Less Spending
DigiPlus’s central difficulty is not necessarily attracting users. It is extracting the same level of spending from them that it once did.
Average monthly active users across the company’s three major digital platforms remained almost unchanged at 5.75 million in the second quarter, compared with 5.74 million in the first. More strikingly, monthly active bettors and depositors rose 26 percent, to 4.68 million from 3.72 million.
GameZone, DigiPlus’s platform for digital versions of traditional Filipino card and table games, recorded the fastest growth. Its average monthly active bettors and depositors rose 47 percent to 1.32 million. BingoPlus increased its corresponding figure by 20 percent to 2.87 million, while ArenaPlus posted a 16 percent increase to 490,000.
But the larger number of active bettors did not translate into more revenue. Retail gaming revenue declined 10 percent from the first quarter to the second, while the number of bettors and depositors rose sharply.
That divergence points to lower spending per customer.
DigiPlus attributed the broader revenue decline to the removal of direct gaming access links from major electronic wallet applications, beginning in August 2025. The change made it more difficult to acquire and reactivate customers and reduced transaction volumes across the company’s digital platforms.
The company’s challenge is therefore more complicated than simply rebuilding its user count. It must persuade an expanding base of customers to deposit and wager more frequently without reverting to the costly promotions that drove its earlier growth.
The Irony of Better Margins
DigiPlus has responded by cutting back on broad-based incentives and directing promotional spending toward customers it believes are more likely to remain active and profitable.
That approach is beginning to show up in its margins.
Net gaming revenue—a company measure of revenue remaining after PAGCOR’s share, game-provider fees, promotions, payment-channel charges and other direct gaming costs—increased slightly to ₱5.52 billion in the second quarter from ₱5.47 billion in the first. Its net gaming revenue margin expanded to 35.3 percent from 31.7 percent.
Earnings before interest, taxes, depreciation and amortization rose 7 percent sequentially to ₱2.84 billion, while the EBITDA margin increased to 18.2 percent from 15.3 percent.
It was an impressive efficiency gain, but also an ironic one. DigiPlus became more profitable at the operating level not because customers spent more, but because the company spent less to attract and retain them.
The danger is that cost-cutting has natural limits. Advertising and promotions can be made more precise, and payment costs can be negotiated lower, but those measures cannot indefinitely substitute for revenue growth. Eventually, DigiPlus will need either higher spending from its digital customers or an additional source of earnings.
The broader year-over-year comparison shows how far the underlying business still has to recover. First-half operating income declined 46 percent to ₱4.52 billion from ₱8.39 billion. Its operating margin fell to 13.75 percent from 17.56 percent, despite the improvement between the first and second quarters of 2026.
A Profit Lifted by an Investment
On paper, DigiPlus nevertheless had an excellent first half. Net income attributable to the parent company rose 17 percent to ₱9.80 billion, and basic earnings per share increased to ₱2.1519.
But those figures were shaped less by online gambling than by the rising estimated value of a financial investment.
During the period, DigiPlus invested ₱12.18 billion in convertible notes issued by International Entertainment Corporation, a Hong Kong-listed company whose subsidiaries own and operate New Coast Hotel Manila, an integrated hotel and casino complex. By June 30, DigiPlus valued those notes at ₱19.27 billion.
The revaluation produced a ₱6.75 billion fair-value gain, along with a ₱341.9 million foreign-exchange effect and ₱77.4 million of interest income. The gain was recorded on DigiPlus’s income statement even though the company had neither sold nor converted the notes nor received the ₱6.75 billion in cash.
Without the revaluation, the company’s earnings would have looked considerably more modest. The fair-value gain alone was greater than DigiPlus’s ₱4.52 billion of first-half operating income.
The notes allow DigiPlus to convert its investment into IEC shares at HK$1 each. Full conversion would give DigiPlus an expected 53.89 percent interest in IEC, effectively allowing it to obtain control of the owner of New Coast Hotel Manila. If the notes are not converted, they carry annual interest of 3 percent and are redeemable at 108 percent of principal after five years.
The valuation was bolstered by an IEC share price of HK$1.54, which was used in the model, well above the notes’ HK$1 conversion price. But the notes are classified as a Level 3 financial asset, meaning their valuation relies on significant assumptions that are not directly observable in an active market. Those assumptions include IEC’s underlying equity value, expected share price volatility, conversion probability, discount rates, and the timing of future cash flows.
The gain is economically meaningful, but it is neither recurring nor certain. If IEC’s share price or estimated business value declines, part of it could be reversed in a later period.
From the Phone to the Casino Floor
The investment also signals a change in DigiPlus’s ambitions.
The company that built its recent success by moving gambling from physical venues to mobile phones is increasingly staking its future on a physical casino property.
New Coast Hotel Manila would give DigiPlus something its digital platforms cannot: an integrated destination with hotel rooms, gaming floors and direct access to a regulated casino operation. It could also connect the company’s online customer base with a physical entertainment venue, creating a broader ecosystem around its brands.
On June 9, New Coast Leisure Inc., an IEC subsidiary, entered into a cooperation agreement with DigiPlus subsidiary Total Gamezone Xtreme Inc. The agreement covers the integration and technical support of approved online gaming content for New Coast’s online operations, subject to PAGCOR approval and other regulatory requirements.
But the strategic pivot comes at a cost.
The IEC investment helped reduce DigiPlus’s cash and cash equivalents to ₱10.51 billion at the end of June from ₱23.40 billion at the end of December—a 55 percent decline. DigiPlus also paid ₱3.78 billion in dividends and spent ₱106.5 million repurchasing shares during the first half.
The company remains conservatively financed, with total equity of ₱47.62 billion against ₱14.27 billion in liabilities. But its liquidity cushion is no longer as deep, and a large part of its balance sheet is now tied to the future of a single casino-related investment. The IEC notes accounted for roughly 31 percent of DigiPlus’s total assets and about 40 percent of its equity as of June 30.
Buying Time
For now, DigiPlus has bought itself time.
Its digital platforms are registering more active bettors. Its marketing is becoming more disciplined. Its second-quarter margins suggest that management can preserve profitability even when customers spend less. And its IEC investment has given it a potentially valuable foothold in the physical casino market.
But none of those accomplishments fully resolve the central problem: DigiPlus’s revenue engine is slowing, and so is its ability to convert earnings into cash.
Cost reductions can protect margins, but they cannot become the company’s permanent growth strategy. Nor can unrealized investment gains reliably replace operating earnings.
DigiPlus’s next phase will therefore depend on two wagers. The first is that its larger digital audience can eventually be persuaded to spend more without requiring another expensive promotional campaign. The second is that a physical casino can provide the growth that its online business is no longer delivering as readily.
The company once bet that the future of gambling would be found on a screen. Now, with that business losing momentum, DigiPlus is placing an increasingly consequential bet on a building.
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Disclaimer: This is for informational purposes and is not investment advice. Figures are taken from company disclosures and exchange data; valuation ratios include the author’s calculations based on cited inputs.
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