DigiPlus [PLUS 27.00, down 0.9%; 111% avgVol] [link] announced it is applying for online gaming licenses in South Africa, doubling down on its global expansion amid rising regulatory risks at home. PLUS said it wants a slice of South Africa’s $1.6-billion online betting industry, which is projected to grow by up to 5% annually on the back of “rising mobile use, a digitally engaged population, and robust demand for live sports betting.” The company will create a legal entity in South Africa and file its license applications with the Western Cape Gambling and Racing Board (WCGRB). The licensing process will start with “intensive probity checks for both the company and its ultimate beneficial owners”.
MB bottom-line: Without context, this move is one that shareholders should cheer, because it’s another example of (IMO) responsible international expansion into another strategically valuable market. With context, however, like the context that it’s possible for its domestic operations to be banned outright or significantly hampered by regulation, the “accelerated” international expansion seems more like a bid for survival. Like us talking about growing a small colony on Mars in case the Earth blows up or becomes otherwise uninhabitable. Brazil and South Africa are PLUS’s Mars colony, except that they don’t need Elon Musk and uninvented tech to get us (the shareholders) there.
Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.
Be the first to comment