The comment, which David Meyer, a reader of The Manila Times, posted on this paper’s website in reaction to “Money keeps govt at peace with gambling,” a Due Diligencer piece which appeared in this space on Dec. 27, 2015, should be an eye opener on the dangers of gambling to society.
Gambling may either be legal, such as casinos, or illegal, such as jueteng. The latter is a two-number game combination that has been with us for centuries. Try asking your grandparents and chances are, they would tell you that jueteng has been the only form of gambling their own grandparents used to play by betting on their choice of two numbers between 1 and 36 (in other areas of the Philippines the highest number varies and goes up to 39).
Although Dr. Meyer did not tell the whole story of gambling in Australia, he told us how it has destroyed a few, if not many, of his countrymen.
“The gov’t may be at peace with gambling,” Dr. Meyer, who has a PhD in Psychology, wrote. “But we have in Australia seen a huge increase in the rise of problem gambling since it became legal.” He mentioned “mental health problems” being one that arises as a result of addiction to gambling.
Mental health problems
For the information of Dr. Meyer, some Filipinos have probably become addicted to gambling. It is a pity, though, that in the Philippines, we have yet to see or read about measures against its adverse effects, such as mental health problems, on gamblers and the society as a whole.
Admittedly, there is much money to be made from gambling, which the government-owned Philippine Amusement and Gaming Corp. would prefer to call gaming.
In a previous Due Diligencer, I wrote about the financials of Leisure and Resorts World Corp. and the taxes that it pays the government.
This time, I am citing the financial performance of one of the listed gaming stocks, which draws much of its revenues from gambling.
Premium Leisure Corp. (PLC) has 31.627 billion outstanding shares, or P6.325 billion at par value of P0.25. A public ownership report showed Belle Corp., which is also listed on the Philippine Stock Exchange, as owner of 24.905 billion shares, or 78.74 percent. The public stockholders hold 6.704 billion shares, or 21.20 percent.
How lucrative as an investment is it for an insider who bought PLC shares at par value of P0.25? The answer is found on PSE’s website, which shows the stock’s market value at P14.074 billion. On April 17, 2015, it paid a dividend of P0.022 per share, which, if repeated this year, would require an allocation of P695.794 million.
What makes PLC attractive as a listed stock?
The answers would make PLC, which closed trading at P0.445 on Jan. 12, a stock to watch for its financial performance, particularly in its first full year as a gaming stock. The nine-month financial posting alone showed the company’s profit potential, given the contribution of gaming to its revenues.
As of Sept. 30, 2015, PLC reported total revenues of P911.215 million, of which P554.281 million, or 60.829 percent, came from gambling. Together with P281.444 million which represents PLC’s pro rata share from Pacific Online Systems Corp. (POSC), that will be a total of P835.726 million, or 91.716 percent of P911.215 million total revenues. PLC owns 50.1 percent of POSC.
Despite Dr. Meyer’s comment on the dangers that gambling poses to society, it cannot be denied that gaming makes PLC profitable. The government, in turn, takes its share from the top, that is from PLC’s revenues in the form of taxes, amounting to P120.256 million for a nine-month period, and undisclosed regulatory fees.
Stock to watch
In short, all these financials suggest that gambling pays well but more for the government, which stands to collect more than PLC’s net profit of P99.391 million.
As for the public investors who trade on listed stocks, if they are in the market for dividend either in cash or in stock, they may have to wait for PLC’s audited financial statement for 2015 for the company’s full-year performance. As of Sept. 30, 2015, PLC had retained earnings of P360.747 million.
Well, again for the information of Dr. Meyer, gambling, whether legal or illegal, does not worry our government. Why should our leaders fear mental illness that, anyway, inhabits the egos of the corrupt among them?
In the Philippines, there is nothing more important in the dirty game of politics than to be able to use government money to bribe politicians, who may be for sale to the highest bidder. This should make bribery the worst form of gambling.