Belle’s Gaming Recovery Hits a Speed Bump as Lottery Roars Back

City of Dreams Manila delivered higher gaming revenue for the first nine months, but a third-quarter decline points to fading momentum. Pacific Online’s lottery business is emerging as the new growth engine.

Belle Corporation’s gaming business is recovering, though the latest quarter suggests the rebound is becoming less certain.

The company’s share of gaming revenue from City of Dreams Manila rose 13% to ₱1.48 billion during the first nine months of 2026, from ₱1.32 billion a year earlier. That helped lift Belle’s consolidated revenue by 11% to ₱4.32 billion and net income by 26% to ₱1.66 billion.

But the nine-month figures conceal a loss of momentum.

Belle’s gaming-revenue share slipped to ₱530 million in the third quarter from ₱545.3 million a year earlier, a decline of nearly 3%. The reversal followed a strong first half, when gaming revenue increased about 23% from the comparable period. In other words, the recovery remains visible in the year-to-date figures, but it was no longer advancing by the end of September.

That distinction matters. Belle benefits from a revenue-sharing arrangement at City of Dreams Manila through its subsidiary, Premium Leisure Corporation. Because the company doesn’t shoulder the casino’s entire operating structure, increases in gaming revenue can translate efficiently into earnings.

That operating leverage remained intact. The cost of gaming operations increased just 1% to ₱106.6 million during the nine months, far below the 13% increase in gaming-revenue share. Even with the third-quarter slowdown, the casino business continued to generate attractive margins.

Still, the latest quarter raises the central question for Belle: Was the decline merely a pause, or has the casino recovery already peaked?

Lottery Is Back

While casino growth cooled, Belle’s lottery business accelerated sharply.

Pacific Online Systems Corporation posted equipment-rental revenue of ₱617.3 million, up 59% from ₱388.4 million a year earlier. The company earns this revenue through PinoyLotto Technologies Corporation, its 50%-owned joint venture that leases online lottery equipment to the Philippine Charity Sweepstakes Office. Premium Leisure owns 50.1% of Pacific Online.

The third quarter was particularly strong. Equipment-rental revenue surged 177% to ₱358.4 million from ₱129.5 million, meaning that about 58% of Pacific Online’s nine-month rental revenue was generated in the latest quarter alone.

The contrast is striking. Belle’s casino revenue declined slightly in the quarter, while lottery-equipment revenue nearly tripled.

The lottery expansion carried additional expenses. Pacific Online’s cost of lottery services increased 24% to ₱347.1 million during the first nine months, mainly because of higher operating costs. But revenue grew more than twice as fast, indicating that the business is gaining scale and contributing more meaningfully to Belle’s results.

For years, Belle’s earnings story centered on City of Dreams Manila, supported by the steady rent it collects from the property. Pacific Online now gives the company another source of growth, one that was accelerating as the casino recovery began to hesitate.

Stable Rent, Faster Lottery Growth

Belle’s earnings increasingly rest on three pillars.

The first is lease income from City of Dreams Manila, which remained almost unchanged at ₱1.77 billion. It provides a relatively stable revenue base, but little growth. The second is Belle’s share of casino gaming revenue, which remains above last year’s level despite the weak third quarter. The third is Pacific Online, now the fastest-growing part of the group.

Together, gaming and gaming-related activities produced ₱2.12 billion in segment revenue during the first nine months, up from ₱1.80 billion a year earlier. The segment’s net profit rose to ₱1.40 billion from ₱1.09 billion.

The changing mix helps explain why Belle’s overall results remained strong despite the casino slowdown. Equipment-rental revenue accounted for 14% of consolidated revenue, up from 10% a year earlier. Casino gaming’s share remained at 34%.

Lottery is no longer a side story. It is becoming an important counterweight to the uneven recovery at City of Dreams Manila.

Debt Reduction Adds Another Lift

Not all of Belle’s earnings growth came from gaming.

Interest expense and other financing charges fell 30% to ₱358 million as the company reduced outstanding debt. Total consolidated debt stood at ₱3.10 billion at the end of September, down 41% from ₱5.28 billion at the end of 2025.

The resulting ₱152.5 million reduction in financing costs contributed substantially to the increase in pretax income. Belle’s interest-coverage ratio improved to 5.73 times from 3.52 times, while net debt fell to just 1% of equity.

That makes the company financially stronger, but it also means the 26% increase in net income shouldn’t be attributed entirely to operating momentum. Part of the improvement came from a leaner balance sheet, a benefit that becomes harder to repeat once debt has already been reduced.

A Recovery, With an Asterisk

Belle’s first nine months show that gaming has recovered from last year. Casino revenue was higher, lottery operations expanded rapidly and the gaming-related segment generated stronger profits.

But the third quarter adds an asterisk.

City of Dreams Manila’s contribution moved backward just as Pacific Online’s lottery revenue surged. The company’s growth story is therefore changing. The casino remains a valuable, high-margin asset, but lottery is carrying more of the incremental growth.

The next quarter will show whether the drop in casino gaming was temporary. A return to growth at City of Dreams Manila, combined with continued expansion at Pacific Online, would give Belle two advancing gaming engines alongside its stable lease income.

If the casino weakness persists, however, Belle’s gaming recovery will look less like a broad rebound and more like a handoff from the casino floor to the lottery terminal.

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Disclaimer: This is for informational purposes and is not investment advice. Figures come from company disclosures and exchange data; valuation ratios reflect the author’s calculations based on cited inputs.