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Pacific Online only bidder for 5-year ‘E-Lotto’ license



Pacific Online Systems [LOTO 4.80, down 1.0%; 449% avgVol] [link] disclosed that the Philippine Charity Sweepstakes Office (PCSO) informed LOTO that it has declared LOTO the “Single Calculated Bid” for the 5-year “E-Lotto” license that was up for auction. LOTO explained that as the “Single Calculated Bid”, LOTO’s bid will be “subjected to post-qualification review by the [PCSO]… should there be no issues raised during post-qualification, it is expected that the [PCSO] will be issuing its Notice of Award.” LOTO was granted a 6-month test license to conduct e-lotto, during which LOTO managed to capture 14% of e-lotto sales. The company is owned by Willy Ocier.

MB bottom-line: Physical casinos are old and busted. Virtual gaming is the new hotness. Part of the reason is the scalability of virtual operations is simply unmatched. If Bloomberry [BLOOM 10.40, down 4.9%; 100% avgVol] wants to double its take from Solaire, it needs to build another Solaire (which it did). That costs a lot of money and takes a lot of time. If LOTO wants to double its take from e-lotto, it just has to… what, spin up another server or something, and then do a better job of marketing? There’s a lot less prestige in operating an online gambling service than in a physical casino, but there’s a lot less external risk and a lot more (potential) profit. As noted by Twitter user @Q4737 (link), it was “probably coincidental” that LOTO’s stock “moved for the past 3 days”. LOTO was up 25% in the three days of trading before the sudden announcement from PCSO.


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