International Entertainment Targets Philippines Launch

Hong Kong-listed International Entertainment Corporation is preparing to commercially launch its online gaming operations in the Philippines in late August or September. Under its agreement with a technology partner linked to DigiPlus, 3% of gross gaming revenue will be allocated to an International Entertainment subsidiary, while the remaining 97% will go to the technology partner.

The company said its initial game portfolio is currently undergoing trial operations, with commercial activity expected to begin within the same late August or September timeframe. The details were disclosed in a supplemental filing submitted to the Hong Kong Stock Exchange.

Under the cooperation agreement, New Coast Leisure Inc. (NCLI), a subsidiary of International Entertainment, will act as the licensed online gaming operator and Gaming System Administrator. Total Gamezone Xtreme Incorporated, a wholly owned subsidiary of DigiPlus Interactive Corporation, will provide gaming software, game content, aggregation, integration and technical support.

The agreed revenue split will be calculated after deductions for PAGCOR's share, gaming licence fees, audit fees, foundation contributions, franchise taxes and other applicable charges.

Electronic Casino Games to Lead the Initial Launch

The first phase of the rollout will concentrate on electronic casino games. These will include titles powered by certified random number generators, electronically delivered table games and arcade-style products categorised by PAGCOR as specialty games.

All games will operate through PAGCOR-approved computer-based software and will not feature live human dealers.

Electronic bingo, online poker and other specialty games intended for remote gaming systems have yet to enter commercial operation. International Entertainment said NCLI has already secured the necessary licences, accreditations and approvals, while also posting the performance cash deposit required by PAGCOR.

Platform Access Limited to Users in the Philippines

Access to the platform will be restricted to individuals physically located within the Philippines. This will include foreign nationals and tourists who meet the required identity verification and know-your-customer requirements.

The existing cooperation agreement does not include integrated resorts offering land-based casino games through online platforms. However, International Entertainment intends to expand at a later stage into land-based electronic gaming terminals, including online table games and online slot machines.

The company said no further licence would be needed before its integrated resort could offer either of those products.

Consultant Identifies Three Medium-Risk Control Issues

An independent consultant reviewing the proposed internal control system identified three medium-risk issues. These included the possibility that previously blacklisted individuals could receive automatic approval without enhanced checks, as well as a lack of periodic reconciliation for manual blacklist updates made during periods of system downtime.

The review also found that some customer risk profiles were stored in paper format, contrary to AMLC guidelines requiring the digitisation of customer records. However, the filing stated that no significant deficiencies in internal controls had been identified.

NCLI has agreed to implement the consultant's recommended improvements. The work is expected to be completed around late August or September, while the consultant's report is expected to be submitted to the board around December 2026.

Gaming Operations Return to Profit

The update on the planned online gaming launch was issued alongside International Entertainment's unaudited financial results for the 12 months ended June 30.

Group revenue increased by 50.6% year-on-year to HK$852.5 million (US$109 million). Revenue from gaming operations rose 60.7% to HK$819.4 million (US$105 million), accounting for 96.1% of total group revenue.

The gaming segment generated a profit of HK$92.0 million (US$11.8 million), compared with a segment loss of HK$234.9 million (US$30.0 million) in the previous period.

Casino operations contributed HK$551.8 million (US$70.6 million), while platform service commissions accounted for HK$125.2 million (US$16.0 million). Income from leasing gaming venues also more than doubled, reaching HK$142.5 million (US$18.2 million).

Attributable Loss Widens Due to Non-Cash Charge

Despite the improved operating results, International Entertainment's loss attributable to owners increased by 72.4% to HK$486.4 million (US$62.2 million).

The result included a non-cash fair value loss of HK$424.9 million (US$54.3 million) related to HK$1.6 billion (US$205 million) in convertible notes issued to DigiPlus.

Excluding that item, International Entertainment said its attributable loss narrowed by 78.2%. The company is continuing preparations for the planned commercial launch while working to complete the recommended control enhancements.