Moody’s expects DigiPlus earnings to fall 20% this year before staging recovery through 2028 on expansion initiatives
Moody’s Ratings has flagged an anticipated 20% year-on-year decline in the 2026 Adjusted EBITDA of leading Philippines online gaming operator DigiPlus Interactive Corp but expects earnings to recover back to prior levels over the next two years.
The forecast by the ratings agency formed part of a Thursday note in which it assigned DigiPlus a first-time B1 corporate family rating with a stable outlook, with Moody’s Ratings Assistant Vice President Yu Sheng Tay explaining that the B1 rating “reflects its leadership in the Philippines’ online gaming market and strong financial profile, underpinned by low leverage, robust cash generation and a net cash position.”
According to the Moody’s team, DigiPlus’s EBITDA will decline to about PHP11.4 billion (US$182 million)1 PHP = 0.0159 USD
2026-09-11Powered by CMG CurrenShift in 2026 from PhHP14.3 billion last year, reflecting the Philippine central bank’s 2025 directive requiring mobile wallet and payment providers to delink in-app access to online gaming platforms. Weaker consumer sentiment amid high fuel prices and broader inflationary pressures have also constrained discretionary gaming spending.
EBITDA is, however, expected to recover to between PHP14 billion (US$223 million)1 PHP = 0.0159 USD
2026-09-11Powered by CMG CurrenShift and PHP15 billion (US$239 million)1 PHP = 0.0159 USD
2026-09-11Powered by CMG CurrenShift in 2027 and 2028, supported by organic growth and contributions from the company’s investment into International Entertainment Corp – the parent company of Manila’s LaVie Resort & Casino.
Moody’s observed that the IEC investment via convertible notes, which could see DigiPlus assume a controlling 53.89% stake in IEC, is “driven partly by a more favorable hybrid gaming tax structure” although it would also increase its exposure to IEC’s capital commitments through 2033 related to LaVie.
Stability amongst change
While there are prevailing risks currently hovering over the Philippines’ online gaming sector as a whole, including a recent tightening of regulations, Moody’s said that DigiPlus is better positioned than most to emerge stronger even amid likely consolidation of the market. The company’s estimated market share stands at 38.5%.
According to the ratings agency, these ongoing regulatory changes will favor incumbents such as DigiPlus that have meaningful scale, financial resources and the ability to adapt.
While the increasingly competitive environment in the Philippines’ online sector present another risk going forward – with DigiPlus’s reliance on third party game providers limiting product differentiation – Moody’s said the company’s existing position in the market gives it a huge advantage over rivals.
“[Digiplus’s] portfolio of more than 1,000 games across bingo, electronic games and sports betting supports user engagement, network effects and efficient customer acquisition and retention,” the ratings agency stated.
“The company also benefits from favorable industry and demographic trends as the Philippines shifts toward a more regulated online gaming framework. A young and growing population, rising urbanization and an expanding middle-income segment underpin long-term demand for online gaming, while regulatory efforts to curb illegal gambling and strengthen oversight support the growth of licensed operators.”
Amid all of this, Moody’s said the credit metrics of DigiPlus remain strong, with strong free cash flow and leverage that is likely to remain below 0.5x for the next 12 to 18 months pending any significant acquisitions.
It noted that the company’s B1 rating takes into account continued regulatory tightening, but not the outright ban on online gaming that some senators have called for.
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The Backstory
Regulatory shock reset DigiPlus’ growth path
Moody’s first rating on DigiPlus Interactive Corp lands at a pivotal moment for the Philippines’ largest online gaming operator. The company remains profitable, cash-generative and dominant in a market that continues to shift toward licensed digital play. But its near-term earnings profile has been dented by a policy change that cut into one of the sector’s most important distribution channels: mobile wallets.
The Philippine central bank’s 2025 directive requiring mobile wallet and payment providers to delink in-app access to online gaming platforms has reshaped user acquisition and payment behavior. For operators such as DigiPlus, the rule increased friction for players and added pressure to marketing efficiency. Moody’s view that adjusted EBITDA could fall 20% in 2026 reflects that disruption, as well as softer discretionary spending caused by fuel costs and inflation.
The issue is not whether online gambling demand has disappeared. The broader record suggests it has not. DigiPlus’ own operating data showed expanding user activity this year, but revenue quality has become more important than headline growth. The company has had to manage higher customer acquisition costs, changes in payment behavior and tighter oversight while maintaining margins in a sector that remains politically sensitive.
A strong quarter showed resilience, but also the strain
DigiPlus entered the Moody’s review with evidence that its platform remained highly active. In August, the company reported a 124% rise in second-quarter net income to PHP6.98 billion, or about US$114 million. Core net income rose 8% from the previous quarter to PHP2.35 billion, while EBITDA climbed 7% sequentially to PHP2.84 billion.
Those numbers supported the argument that DigiPlus has scale and operating flexibility. Monthly active users reached 5.75 million in the quarter, while monthly average bettors and depositors rose 26% to 4.68 million. Management said the figures reflected the strength of its Gaming-as-a-Service strategy, product development and platform reach.
Yet the same results also showed why Moody’s is cautious about 2026. Gross gaming revenue fell 9% from the previous quarter to PHP15.61 billion, even as player activity increased. DigiPlus attributed the decline mainly to higher customer acquisition costs and macroeconomic conditions that affected player spending. The shift underscored a central tension for online operators: growth in active accounts does not automatically translate into stronger revenue when regulation, inflation and competition raise the cost of keeping players engaged.
The company’s adoption of net gaming revenue as a reporting metric also pointed to a maturing market. By stripping out regulatory shares, provider fees, marketing costs, payment charges and other direct gaming expenses, the measure gives investors a clearer view of underlying performance. That change fits with Moody’s focus on cash generation, margins and leverage rather than raw betting volume.
The LaVie deal gives DigiPlus an offline hedge
Moody’s recovery case for DigiPlus depends partly on its investment in International Entertainment Corp, the Hong Kong-listed owner of LaVie Resort & Casino in Manila. The transaction, structured through convertible notes, could give DigiPlus a 53.89% controlling stake in IEC after full conversion. That would push the online operator deeper into land-based gaming and create a bridge between digital customers and a physical casino-resort platform.
DigiPlus has described the IEC investment as a way to strengthen an “omnipresent entertainment ecosystem” by adding an offline platform connected to its digital network. The strategy matters because the Philippines is not only tightening online controls; it is also encouraging regulated operators that can demonstrate compliance, capital strength and traceable customer activity. A licensed integrated resort gives DigiPlus another channel for brand activation and player engagement, while potentially offering a more favorable hybrid gaming tax structure.
The target asset is undergoing a major transformation. IEC has committed as much as US$1.2 billion to convert the former New Coast Hotel casino into a full-scale integrated resort. Inside Asian Gaming reported that the US$1 billion renovation of LaVie Resort & Casino was well underway and targeted for completion around year-end.
That capital program also creates risk. Moody’s noted that exposure to IEC would increase DigiPlus’ link to LaVie’s commitments through 2033. The deal could diversify earnings and support a rebound in 2027 and 2028, but it also ties DigiPlus to a long-dated development plan in a competitive Manila casino market.
IEC’s digital ambitions moved the partnership beyond capital
The relationship between DigiPlus and IEC has evolved quickly from a balance-sheet investment into an operating partnership. IEC, which took over full operations of the former PAGCOR-run casino at New Coast Hotel in May 2024, disclosed that it was exploring a move into the Philippines igaming market after its subsidiary New Coast Leisure Inc. secured an Electronic Games Operator license from PAGCOR in February 2025.
That move was strategically aligned with DigiPlus’ pending control of IEC. IEC wanted to broaden its revenue base and improve liquidity, while DigiPlus wanted a land-based partner that could extend its digital ecosystem. The combination also matched the direction of Philippine regulation, where licensed online operations are being brought under closer scrutiny and illegal gambling remains a policy target.
By mid-2026, the plan had advanced. IEC said its subsidiary and DigiPlus-linked Total Gamezone Xtreme Inc. were ready to launch a new Philippines online gaming platform after securing required PAGCOR licenses. The structure favored DigiPlus’ side of the partnership: TGXI was entitled to 97% of gross gaming revenue, while NCLI would receive 3% and hold the licenses, operate the platform and handle compliance.
The platform was expected to start with electronic casino games using random number generators, without live dealers, before expanding to electronic gaming terminals and online table and slot machines linked to LaVie. That sequencing shows how the two companies are trying to merge online scale with a resort-based gaming license, while addressing anti-money laundering, know-your-customer and internal control requirements.
Governance and global expansion raised the stakes
IEC has also moved to strengthen governance as DigiPlus’ influence grows. In March, the company appointed Brian Mattingley, former chief executive of 888 Holdings and former chairman of Playtech, as an independent nonexecutive director. His appointment to the IEC board brought international online gaming and public company experience to a business attempting to operate across land-based casino development and digital gaming.
The addition was more than cosmetic. IEC is taking on a large resort redevelopment, preparing online operations and aligning with a Philippine market leader under increasing regulatory attention. Board oversight, audit controls and compliance systems will be critical if the company is to convert licenses and capital spending into durable earnings.
DigiPlus is also looking outside the Philippines. The company operates in Brazil, is licensed in South Africa and has approved an expression of interest to apply for a gaming license in New Zealand, where online gaming is expected to launch in December. Those moves could reduce concentration risk over time, though they also require investment and regulatory execution in markets with different tax, compliance and consumer dynamics.
The rating frames consolidation, not retreat
Moody’s stable outlook suggests DigiPlus is not viewed as a distressed credit despite the expected earnings decline. The agency highlighted low leverage, strong free cash flow and a net cash position, with leverage likely to remain below 0.5 times over the next 12 to 18 months absent major acquisitions. That financial flexibility is central to the company’s ability to absorb regulatory costs and fund expansion.
The larger implication is that tighter rules may accelerate consolidation rather than halt market growth. Operators with scale, capital and compliance systems are better positioned to adapt to wallet restrictions, anti-money laundering demands and higher scrutiny. Smaller or less compliant rivals may find it harder to compete as licensed platforms become more expensive to run.
Still, political risk remains. Moody’s rating incorporates continued regulatory tightening but not an outright online gaming ban, which some senators have advocated. That distinction is crucial. DigiPlus’ recovery case assumes the Philippines continues building a regulated online gaming framework instead of dismantling it. If that assumption holds, the company’s scale, LaVie investment and cross-channel strategy could restore earnings by 2027 and 2028. If policy turns sharply against online gaming, the sector’s strongest operator would still face a materially different future.
