S&P Global Ratings warns DigiPlus EBITDA margins could fall to 14.5-16 percent as higher customer acquisition and retention costs offset lower gaming tax benefits following e-wallet delinking order.
DigiPlus margin squeeze stems from marketing costs offsetting tax savings. S&P expects EBITDA margins to fall to 14.5-16% from 18% average in 2024-2025. Revenue and EBITDA should resume growth over next 12 months despite regulatory risks.
- EBITDA Margin Compression Expected
- Customer Acquisition Cost Pressures
- Regulatory Uncertainty Risks
- Market Share and Competitive Position
DigiPlus Interactive Corp. faces profitability pressure as higher customer acquisition and retention costs could offset benefits of lower gaming taxes, according to S&P Global Ratings. The agency assigned DigiPlus a B+ long-term issuer credit rating with stable outlook. S&P expects revenue and EBITDA to resume growth over next 12 months supported by market position and large user base.
EBITDA Margin Compression Expected
The agency expects DigiPlus EBITDA margins to fall to 14.5-16 percent over next two years, compared with average of 18 percent in 2024-2025. Higher customer acquisition and retention costs weigh on margins according to S&P September 16th report. The margin warning comes as DigiPlus continues recovering from August 2025 order separating e-wallets from online gambling platforms.
Monthly active users recovered modestly in first half of 2026, but S&P said they might remain below pre-delinking levels over next two years. Despite those pressures, S&P expects DigiPlus to retain 40-50 percent share of Philippine online gaming market over next two years. The second-largest operator holds 15-20 percent share.
Following this analysis, DigiPlus maintains strong competitive position. Locally tailored products and in-house development capabilities support customer retention. Engagement through digital platforms and physical sites strengthens user loyalty. However, regulatory uncertainty remains major risk for Philippine online gaming operators.
Customer Acquisition Cost Pressures
S&P cited e-wallet delinking and advertising restrictions as key factors driving up customer acquisition and retention costs. The agency noted these regulatory measures directly impact DigiPlus profitability. Marketing expenses now consume larger portion of operating budget.
Tighter marketing environments force operators to spend more per new user. Advertising restrictions limit promotional channels available to operators. E-wallet delinking reduces payment convenience for existing customers. Both factors increase churn and acquisition expenses.
Following this report, S&P expects revenue and EBITDA to resume growth over next 12 months. The company’s market position and large user base provide buffer against margin pressure. However, long-term profitability depends on regulatory environment stabilization. DigiPlus must balance compliance with growth objectives.
Regulatory Uncertainty Risks
S&P noted proposed Senate legislation could strengthen player protection requirements or prohibit online gambling altogether. The agency warned tightening regulations will slow growth, create volatility, and increase costs for online gaming operators. DigiPlus Arden Consult remains heavily exposed to those changes with online gaming accounting for more than 90 percent of revenue and profits.
Regulatory tightening could also support consolidation in Philippine online gaming market. S&P said stricter enforcement and proposed minimum fee for licensed operators could raise barriers to entry and push out smaller competitors. This dynamic benefits established companies with stronger brands and financial resources.
As a result, DigiPlus’s strong balance sheet and ample liquidity should help manage regulatory disruption and sustain operations. S&P also flagged execution risks associated with DigiPlus investment in International Entertainment Corp. and overseas online gaming market expansion. The agency estimates these initiatives could contribute 10-20 percent of revenue and EBITDA by 2027 as they ramp up, while potentially increasing cash flow volatility.
Frequently Asked Questions
What is the S&P forecast for DigiPlus EBITDA margins?
S&P expects DigiPlus EBITDA margins to fall to 14.5-16 percent over next two years, compared with average of 18 percent in 2024-2025. Higher customer acquisition and retention costs offset lower gaming tax benefits following e-wallet delinking order.
Why are marketing costs threatening DigiPlus profitability?
E-wallet delinking and advertising restrictions drive up customer acquisition and retention costs. These regulatory measures directly impact DigiPlus profitability despite lower gaming taxes. Monthly active users might remain below pre-delinking levels over next two years.
What is DigiPlus’s market share in Philippine online gaming?
S&P expects DigiPlus to retain 40-50 percent share of Philippine online gaming market over next two years. The second-largest operator holds 15-20 percent share. Locally tailored products and in-house development capabilities support customer retention.
What regulatory risks does S&P identify for DigiPlus?
Proposed Senate legislation could strengthen player protection requirements or prohibit online gambling altogether. S&P warned tightening regulations will slow growth, create volatility, and increase costs for online gaming operators. DigiPlus remains heavily exposed with online gaming accounting for more than 90 percent of revenue.
How does regulatory tightening affect Philippine online gaming?
Stricter enforcement and proposed minimum fee for licensed operators could raise barriers to entry and push out smaller competitors. This dynamic benefits established companies with stronger brands and financial resources like DigiPlus. Regulatory uncertainty remains major risk for the industry.
This article has been thoroughly researched and reviewed by the CasinoBait editorial team to ensure accuracy and relevance for Asian casino players.
