IEC's Loss and DigiPlus's Profit Come From the Same Convertible Notes

What happened

International Entertainment Corp reported gaming revenue up 60.7% year-on-year to HKD819.4 million for the twelve months to June 30, 2026, with group-wide revenue up 50.6% to HKD852.5 million, driven by the expansion of LaVie Resort & Casino Manila, the Manila Bay property formerly known as New Coast Hotel Manila, as reported by GGRAsia and ASGAM. The company's loss attributable to owners widened to HKD486.4 million (US$62 million), from HKD282.1 million the prior year. IEC confirmed the wider loss was due to a non-cash change in the fair value of financial liabilities linked to HKD1.6 billion in convertible notes issued during the period, notes subscribed to by DigiPlus Interactive Corp.

Separately, IEC's indirect subsidiary New Coast Leisure Inc. signed a cooperation agreement on June 9 with Total Gamezone Xtreme Inc., a wholly-owned DigiPlus subsidiary, covering integration, aggregation, and technical support for online gaming content connected to LaVie's platform and operations, explicitly subject to regulatory approvals not yet confirmed.

Why it matters

The loss figure is worth correcting directly, since the natural reading, expansion costs outpacing revenue, isn't what actually happened. IEC's widened loss is a non-cash fair value item on the same convertible notes we flagged when covering DigiPlus's own results. That's not a coincidence, it's the same financial instrument producing opposite accounting outcomes for the two parties on either side of it, a gain for DigiPlus as the note holder, a loss for IEC as the issuer. Neither figure reflects underlying operating performance, and reading either one at face value, in isolation, produces a distorted picture of both companies.

The actual operating story is the 61% gaming revenue growth, which reflects genuine demand following LaVie's renovation and table and slot expansion completed in January, not accounting noise. That's a real, organic growth story sitting underneath a headline loss number that looks alarming on its own.

The online gaming cooperation agreement is the detail worth the closest reading. It runs through Total Gamezone Xtreme, a DigiPlus subsidiary, not through IEC independently securing new regulatory permissions. That's a meaningfully different structure than "IEC found a way around PAGCOR's license freeze." It looks much closer to DigiPlus extending its own existing online platform and infrastructure through a land-based partner's brand and physical venue, with LaVie providing the customer base, physical credibility, and Manila Bay location, while DigiPlus supplies the online technology and, presumably, the regulatory standing behind it. The agreement remains subject to approval, so this isn't confirmed or operating yet.

Read alongside DigiPlus's international moves we covered previously, hiring Teneo for regulatory and political advisory support ahead of a New Zealand licence filing, this online cooperation agreement shows DigiPlus building two different kinds of exposure to the same domestic counterparty simultaneously: a passive financial stake through the convertible notes, and an active commercial and technical partnership through the online cooperation deal. That's a distinct pattern from the international hedging in the Teneo piece. This is domestic ecosystem-building, DigiPlus extending its reach through a land-based partner rather than looking outward for growth.

What to watch

Confirmation of the regulatory approvals the online cooperation agreement depends on. Until PAGCOR or another relevant authority confirms the structure, this remains a signed intent, not an operating online platform. Watch for a PAGCOR filing or joint statement from either company.