The license is issued to a specific corporate person with a disclosed ownership chain. It is not a freely tradable permit. When founders sell a stake, issue a new class of shares, grant a call option, or insert a holding company, they may trigger a change-of-control or “material change” condition—even if the SEC paperwork is perfect and the brand does not change.
What usually counts as control
Gaming regulators look past the 50% + 1 share test. Fit-and-proper regimes typically capture directors, key officers, and persons who can appoint them; shareholders at stated percentage thresholds (often 5%, 10%, or 20% depending on the issuance); and anyone with a veto, golden share, or management agreement that amounts to control. Indirect holdings through funds, trusts, and layered offshore companies count. If you need a chart to explain who can fire the CEO, the regulator needs that chart too.
Notify, don’t surprise
Most licenses require prior written approval for a change of control, or at least prior notice with a waiting period. Closing first and “regularizing” later is a classic show-cause fact pattern. Buyers who wire funds against an unapproved transfer inherit a license that may already be in breach.
A clean sequence looks like this:
- Shareholders’ agreement and term sheet flagged as “subject to regulator approval.”
- Updated UBO chart, source-of-funds files, and police/NBI or apostilled clearances for incoming persons.
- Draft SPA and any new financing documents, with gaming-consent as a condition precedent.
- Formal letter to PAGCOR (or CEZA/APECO) attaching the pack.
- SEC transfer, GIS update, and bank signatory changes only after the consent or deemed clearance.
Options, convertibles, and “economic” deals
Founders sometimes say there was “no transfer yet” because the buyer only holds a convertible note, a warrant, or a side letter promising shares after a license renewal. Regulators still ask who has the economic interest and who can block a sale. Disclose the instrument. Hiding it until conversion is worse than filing an incomplete but honest notice.
Employee option pools can also cross a threshold in aggregate. Keep a cap table that includes fully diluted figures and refresh it before every funding round.
What buyers should diligence
Acquirers of a licensed operator should read the license conditions, not only the SPA warranties. Ask for the last three correspondence files with the regulator, any pending show-cause, unpaid license fees, and whether previous share transfers were approved. A warranty that “the company is duly licensed” is thin if the license is personal and already in default.
Abanto Law Firm structures gaming-sensitive M&A: consent conditions, UBO exhibits, and closing checklists that match PAGCOR and freeport notice rules so the license survives the deal.
This article is general information about Philippine online casino licensing. It is not legal advice, does not create a lawyer-client relationship, and does not guarantee that a regulator will approve any application. License grants remain solely within the discretion of PAGCOR, CEZA, APECO, or any other competent authority. Contact Abanto Law Firm for advice on a specific transaction.
