Country looks to beat Vegas

Posted on February 19, 2014

THE PHILIPPINE gaming industry is seen to rake in higher revenues in the upcoming years from the opening of more casinos, which are hoped to establish the country as the world’s second biggest gaming hub by 2020.

Gambling table attendants practice their dealing at the Solaire Resort and Casino in Pasay, in this March 14, 2013 photo. Officials hope the Philippine gaming industry will overtake Las Vegas’s revenues by 2020. -- BW File Photo
“For 2013, we had gross gaming revenues (GGR) of about $2.2 billion. For 2014, we’re looking at, at least, $2.5 billion,” Philippine Amusement and Gaming Corp. (Pagcor) Chairman and Chief Executive Officer Cristino L. Naguiat, Jr. yesterday said at “The Rise of the Gaming Industry”, a panel discussion at the Philippine Investment Forum in Solaire Resort & Casino, Parañaque City.

“By 2020, I think we could be comparable if not better than Singapore [and earn] around $6-7 billion,” he added.

“The vision here is, we will become a gaming hub not only in Asia but in the world. We’re looking at least to be the number two in the world after Macau,” said Mr. Naguiat.

Solaire operator Bloomberry Resorts Corp. Chairman and President Enrique K. Razon, Jr. concurred but said: “We would have earned 20% more last year if not for the dispute with China.”

The Philippines and China are embroiled in a territorial row over portions of the South China Sea, with the former haling the latter to arbitration at the International Tribunal on the Law of the Sea.

Mr. Naguiat said the growth in revenues will be driven by the opening of more casinos.

Set to join Solaire in Entertainment City -- the eight-square-kilometer property owned by state-run Pagcor -- are Melco Crown (Philippines) Resorts Corp.’s City of Dreams Manila, expected to be fully operational by the third quarter; Tiger Resorts and Entertainment, Inc.’s The Manila Bay Resorts, set to open next year; and Westin Starwood Hotels & Resorts’ Resorts World Bayshore, scheduled to start operations in 2016.

Debt watcher Fitch Ratings said in a February special report that it expected “double-digit gaming revenue growth to continue at least well into 2015...”.

Fitch did note that the industry’s growth trajectory past 2015 was difficult to forecast given several risks and constraints.

“[W]e think it will be difficult for the Philippines to surpass Singapore in terms of gaming revenues (roughly $6 billion) before the end of this decade,” it said.

While the Philippines is a “relatively mature gaming market,” risks and constraints to the industry’s outlook include Pacgor’s “dual role as an operator and a regulator,” among others.

The debt watcher likewise pointed out the country’s “nascent transportation infrastructure relative to the ambitious tourism initiatives (e.g. Entertainment City).”

The gaming industry also faces regulatory risks, such as “uncertainty” related to the payment of corporate income tax by operators and the “risk of legislation being enacted that restricts operations, imposes entry levies, increases tax, and/or changes licensing requirements.”

Border disputes with China could likewise discourage high rollers from the world’s second-largest economy from visiting, it added.

Industry-generated gaming revenues reached $2 billion in 2012. -- Daryll Edisonn D. Saclag