Caesars Entertainment wants to bet US billion on a resort casino adjoining Manila’s Ninoy Aquino International Airport, and if the Las Vegas-based casino giant can raise that to .5 billion, it might be a go.
Last month, Philippine President Benigno Aquino met with CEO Gary Loveman, President of International Development Steven Tight and other top Caesars officials to discuss the plan, which Caesars has followed up on with a written expression of interest, according to Cristino Naguiat, head of Philippine gaming regulator PAGCOR.
The government, however, is requiring that new casino investors commit to least $1.5 billion, $500 million more than the minimum set for the four developers licensed at the government’s Entertainment City reclamation district on Manila Bay.
“If we bring in something new, it has to add value to the development of Entertainment City,” Naguiat told Reuters. “They will be facing new terms of reference—the new investors.”
An airport location would put Caesars in direct competition with Resorts World Manila, which opened its casino hotel complex opposite the city’s main international gateway in 2009 and has grown it into the country’s largest and most lucrative gaming operation.
It also would bring the number of Manila megaresorts, either existing or under development, to six, a possibility the government would be expected to welcome as it looks increasingly to resort-scale gaming to boost foreign tourism and investment and provide badly needed jobs.
“There is no major international brand currently in Manila,” Tight said in an interview with Bloomberg. “There’s a chance to create something that will drive tourism, that will really put Manila on the regional tourist map.”
Entertainment City has been the centerpiece of this plan so far. The first of the four licensees, Solaire Resort & Casino, owned by PSX-listed Bloomberry Resorts, opened its $750 million first phase last year. The second, City of Dreams Manila, controlled by Macau casino giant Melco Crown Entertainment and priced at $1 billion, is slated to open its first phase at the end of this year or early in 2015. A Philippine subsidiary of Japanese gaming machine tycoon Kazuo Okada is expected to unveil the first phase of its $2 billion Manila Bay Resorts in 2016. Resorts World’s owners, PSX-listed Travellers International Hotel Group, broke ground last month on their $1.1 billion Bayshore City Resorts World, with a 2018 opening planned.
Asia has begun to look promising for Caesars as it pursues expansion beyond the US domestic market, where it is struggling outside of Las Vegas to grow revenues sufficient to service its industry-leading $23 billion debt load. A joint venture led by the company scored a major coup earlier this year by winning preliminary approval from the government of South Korea to develop an $800 million resort casino in Incheon near the country’s main international airport.
The company’s Manila strategy will similarly involve leveraging the airport location to create an adjunct capable of receiving private aircraft directly into the resort, Tight said.
Aquino, in the meantime, said his cabinet is debating the proposal.
“There are some sectors that are saying they will not add to the gaming revenues of government. There are those who are saying Caesars is a brand name that tells the world that essentially we have arrived,” he said. “I am still awaiting the consensus coming from the cabinet.”
