Moody’s Assigns DigiPlus B1 Rating as 2026 EBITDA Is Seen Falling

Moody’s Ratings has assigned DigiPlus Interactive Corp an initial B1 corporate family rating, with a stable outlook, while forecasting a 20.3% decline in the company’s EBITDA for 2026.

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DigiPlus, a provider of online gambling services in the Philippines that also holds licenses in South Africa and Brazil, is expected to report annual EBITDA of about PHP11.4 billion, or US$181.8 million, this year. This would be down from PHP14.2 billion in 2025.

The B1 rating is below investment grade. Moody’s said DigiPlus’ strong position in the Philippine online gaming market, low leverage, cash generation, and net cash position supported the rating. However, these strengths are balanced by regulatory changes, strong competition, and risks linked to the company’s expansion plans.

According to Moody’s, the company’s heavy focus in the Philippines makes it vulnerable to volatile earnings due to constant changes in regulations. On the other hand, the ratings company believes stricter regulations may actually fast-track industry consolidation, which would work favorably for large players that can afford it.

Regulatory Changes Affect Revenue

The expected EBITDA decline is linked to the Philippine central bank’s August 2025 directive requiring mobile wallet and payment providers to delink in-app access to online gaming platforms.

Moody’s said the directive reduced online gross gaming revenue across the industry. The agency also pointed out reduced consumer confidence, rising fuel costs, and general inflation as reasons why gambling revenues might be constrained.

DigiPlus announced that its second-quarter EBITDA dropped by 36.9% to PHP2.84 billion. Moody’s expects the company’s earnings to recover to around PHP14 billion to PHP15 billion in both 2027 and 2028.

The projected recovery is expected to be supported by organic growth, contributions from the consolidation of International Entertainment Corp, and overseas investments.

Market Position in the Philippines

Moody’s said DigiPlus is now the largest online gaming operator in the Philippines. The company has an estimated market share of 38.5% and around 6 million monthly active users.

Its portfolio includes more than 1,000 games across bingo, electronic games, and sports betting. Moody’s said this wide offering supports user engagement, network effects, and more efficient customer acquisition and retention.

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However, the ratings agency also noted that DigiPlus relies on third-party game providers, which limits its product differentiation. The company livestreams some games and is developing proprietary content to support user engagement and product differentiation, but Moody’s said these efforts do not fully offset competitive pressure in the market.

The B1 rating takes into account the likelihood of continued regulatory tightening in the Philippines. However, Moody’s does not assume a complete ban on online gaming.

International Entertainment Investment

In early June, DigiPlus completed a second subscription to convertible notes issued by Hong Kong-listed International Entertainment, valued at HKD800 million, or US$102.1 million.

The company’s total HKD1.60 billion convertible-note package could give DigiPlus a 53.89% stake in International Entertainment if fully converted. International Entertainment controls the LaVie Resort & Casino Manila, which holds a provisional casino gaming license from the Philippine Amusement and Gaming Corp.

Moody’s said that converting the notes would increase DigiPlus’ exposure to International Entertainment’s capital commitments through 2033 related to LaVie Resort & Casino Manila.

The ratings agency added that DigiPlus is planning to expand into land-based casinos, partly because of a more favorable hybrid gaming tax structure. The company is also expanding its online gaming operations in Brazil and South Africa and plans to apply for an online gaming license in New Zealand.

Funding and Financial Position

Moody’s said that DigiPlus’ growth plans introduce execution and financial risks. Still, it described the company’s credit metrics as strong.

The ratings agency expects DigiPlus’ leverage to remain below 0.5 times over the next 12 to 18 months, unless the company makes significant acquisitions or investments. DigiPlus has stated that it aims to keep net debt to EBITDA below 3.0 times, which Moody’s said indicates capacity and willingness to use additional debt for growth.

As of June 30, DigiPlus held PHP10.5 billion in cash and cash equivalents. Moody’s expects the projected operating cash flow of PHP19.5 billion to be sufficient to cover PHP7.6 billion in capital spending, PHP1.3 billion in scheduled debt maturities, and PHP4.2 billion in shareholder returns through December 2027.

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Source: GGR Asia