Pacific Online Systems Corp. (LOTO) has scrapped its plan to acquire a 37.5 percent stake in HHR Philippines, Inc. (HHRPI), a licensed provider of gaming software and services, after government restrictions blocked online betting platforms.

In a Thursday stock exchange filing, LOTO said it and HHRPI have mutually agreed to unwind the investment in line with the national government’s firm stance against licensing online gaming operations.

“Because of the firm policy adopted by the national government against the licensing of online betting platforms, the Company and HHRPI have mutually agreed to revisit their investment arrangement and unwind the same, with a private third-party investor agreeing to assume the rights and obligations of the Company from its HHRPI investment,” LOTO said.

LOTO will cease to be a shareholder of HHRPI once regulatory requirements are completed. The company, however, assured that the exit will not have a significant impact on its financials.

The company announced plans last year to acquire a 37.5 percent stake in HHRPI for P150 million to expand its online gaming presence.

The January 2025 agreement had Pacific Online subscribing to 81,000 HHRPI common shares, payable in three tranches.

HHRPI is a PAGCOR-licensed provider of software and services for both land-based and online gaming operators, holding an online gaming license under the brand “Buenas.” The investment was intended to fund HHRPI’s expansion initiatives.

LOTO, a gaming unit of Belle Corp., manages online lottery systems, terminals, and software for the Philippine lottery industry, complementing its parent company’s wider resort and gaming operations.