Bloomberry Resorts Corp.'s MegaFUNalo: A High-Stakes Gamble on Philippine Online Gaming Dominance

The Philippine online gaming sector is undergoing a seismic shift, with established players and newcomers alike vying for market share. Central to this transformation is Bloomberry Resorts Corp. (BRC), the operator of the iconic Solaire Resorts & Casino, which has launched its ambitious online gaming platform, MegaFUNalo, to counter the fallout from the 2023 Philippine Offshore Gaming Operators (POGO) ban. As the company transitions from land-based resorts to digital dominance, investors must weigh its potential to disrupt the market against the risks of costly competition and delayed profitability.

The Financials: Growth Amid Growing Pains

Bloomberry's Q1 2025 results reveal a company navigating a precarious balancing act. While net income surged 26% to PHP 3.3 billion, this was largely due to a one-time PHP 2.9 billion gain from refinancing debt. Stripping out this non-cash windfall, core earnings plummeted 83% to PHP 445.8 million, underscoring reliance on legacy operations. Revenue grew 15% to PHP 14.35 billion, driven by a 35% jump in non-gaming revenue (hotels, dining) and a 29% rise in mass-market gaming at Solaire North. However, the VIP segment—a former cash cow—sank 23% due to the POGO ban's lingering effects.

The real story lies in the online pivot: BRC's Q1 results included no direct financial contribution from MegaFUNalo, which only began its grand launch in late 2024. Instead, the platform's impact is reflected in soaring costs. BRC plans to spend PHP 1–2 billion quarterly on advertising and promotions, with outsourced app development and customer acquisition expenses further straining margins. Analysts at Abacus Securities warn profitability for the online venture may not materialize until 2026, leaving near-term earnings at risk.

Market Disruption: Can MegaFUNalo Outmaneuver the Competition?

The Philippine online gaming market, projected to hit PHP 261 billion by 2025, is a battleground. Bloomberry faces entrenched rivals like DigiPlus Interactive Corp., which dominates with its BingoPlus platform. To differentiate, MegaFUNalo offers a unique hybrid model: users can gamble on classics like poker and blackjack while streaming free movies from Viva Media's catalog. The platform targets users 21+, a demographic underserved by competitors focused on younger audiences.

BRC's strengths lie in its brand equity and financial firepower. Its Solaire Resorts are synonymous with luxury, and its PHP 14.35 billion Q1 revenue underscores liquidity to sustain losses. However, the path to disruption is littered with hurdles. DigiPlus, despite tripling its ad spend in 2024, lost market share—a cautionary tale for newcomers. Meanwhile, new entrants like Alliance Global Group and Hann Holdings are flooding the space, intensifying competition.

Valuation Upside: Betting on Long-Term Market Share Capture

The question for investors is whether MegaFUNalo's potential justifies BRC's valuation. Analysts project the platform could contribute up to 18% of BRC's revenues by 2025, but achieving this requires capturing at least 5% of the online gaming market—a tall order given DigiPlus's entrenched position.

Key risks:
1. Customer Acquisition Costs: BRC's PHP 1–2 billion quarterly ad spend may deter short-term profitability.
2. Regulatory Hurdles: The Philippine government's stance on online gaming remains unpredictable, with licensing delays and compliance costs.
3. Competitive Saturation: With multiple entrants, pricing wars or diluted margins could stifle profits.

However, the upside is compelling. If MegaFUNalo gains even 3–4% market share by 2026, its EBITDA could rival Solaire North's current PHP 1.1 billion contribution. BRC's stock, up 92% since April 2023 lows to PHP 5, already reflects investor optimism. Yet, the stock's valuation (15x forward P/E) appears stretched against peers unless margins improve.

Investment Thesis: A Wait-and-See Approach

Investors should tread cautiously. While BRC's physical operations (hotels, Solaire North) provide a stable base, MegaFUNalo's success hinges on execution. Key metrics to watch:
- User Growth: Monthly active users (MAUs) and retention rates.
- Cost Efficiency: Ad spend per user acquired and revenue-sharing terms with app developers.
- Market Share: Quarterly updates on revenue contribution and competitive positioning.

For now, the stock's elevated valuation suggests limited upside unless BRC delivers tangible traction. A hold rating is warranted until Q3 2025 results confirm market share gains or cost discipline.

Final Verdict

Bloomberry's MegaFUNalo is a bold move, leveraging its brand and balance sheet to disrupt a fragmented market. While the platform's long-term potential is undeniable, the path to profitability is fraught with execution risks. Investors seeking exposure to Philippine gaming should prioritize patience, focusing on BRC's ability to convert its offline dominance into online relevance. Until then, the dice remain in the air.