AsianLogic in J.V. with Parent Co. of Cagayan Freeport Master Licensor

23 June 2008

AsianLogic Ltd. is seeking to further extend its reach into Asia through a joint venture with Leisure and Resorts World Corporation, a company that operates bingo parlors in the Philippines and also happens to control the master licensor for online gambling in the Cagayan Special Economic Zone and Freeport.

Leisure and Resorts, a public company, has disclosed to the Philippine Stock Exchange that it will "enter into a Memorandum of Agreement with AsianLogic . . . for the acquisition of a new local company to be engaged in land-based sportsbook operation services."

The company hasn't revealed much else, but it looks like the venture could have broad ambitions.

"This group [AsianLogic] has a presence in Macau, China and other countries in the region," Alfredo Reyes, head of investor relations at Leisure and Resorts, told the Philippine Daily Inquirer. "We are interested in this partnership, and it will open up markets for the company and opportunities in the gaming industry."

The company's president, Alfredo B. Benitez, echoed the sentiment: "We want to take advantage of the gaming boom in Asia, driven by Macau, Singapore and the Philippines," he told the Philippine Star.

Leisure and Resorts owns Bingo Bonanza Corporation, which operates 36 bingo parlors throughout the Philippines. Bingo Bonanza uses a central data center to manage linked games so that players can play and interact with customers located at other parlors.

Although there has been no mention of plans to provide remote gambling services through the venture, readers may find it particularly interesting to learn that Leisure and Resorts is the parent company of First Cagayan Leisure and Resort Corporation, which is the agency responsible for licensing and regulating remote gambling in Cagayan Freeport.

Cagayan Freeport is a jurisdiction at the northern tip of the Philippines that operates independently of the Philippines and all other national governments. In many ways the zone resembles an offshore jurisdiction, such as Alderney or Antigua and Barbuda. So does its treatment of remote gambling.

As master licensor for Cagayan Freeport, First Cagayan Leisure evaluates applications and awards licenses to qualified operators of online casinos, sports betting and lotteries. At the moment, the company regulates 36 online gambling operators.

With regard to the deal's structure, Leisure and Resorts will issue one third of its extended capital to AsianLogic in the form of shares. The company's shares are valued at 3.50 Philippine pesos each, or 7 cents, which is a 41 percent premium over Friday's trading price of 2.48 Philippine pesos, or 5 cents.

The shares are to be distributed across six semi-annual periods, with full issuance dependent upon the venture's attaining projected income targets.

The deal will be put to Leisure and Resorts shareholders for a vote at the company's next annual stockholders' meeting on September 19.

AsianLogic, which trades on the London Stock Exchange, has not filed any disclosure notices about the deal. AsianLogic already operates land-based sports betting in the Philippines through its MegaSportsWorld brand.

Bradley Vallerius

Articles by Bradley P. Vallerius, JD manages For the Bettor Good, a comprehensive resource for information related to Internet gaming policy in the U.S. federal and state governments. For the Bettor Good provides official government documents, jurisdiction updates, policy analysis, and many other helpful research materials. Bradley has been researching and writing about the business and law of internet gaming since 2003. His work has covered all aspects of the industry, including technology, finance, advertising, taxation, poker, betting exchanges, and laws and regulations around the world.

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