The takeover of Okada Manila by official aligned with the former chairman of the company Kazuo Okada is over. Just three months after the Okada group forcibly took over the property operated by Tiger Resort, Leisure and Entertainment Inc (TRLEI), from a board representing the Tiger Resort Asia Limited, a very similar situation took place with the opposite result, according to Inside Asian Gaming magazine.
Although the Philippine regulator Philippine Amusement and Gaming Corp. (PAGCOR) was complicit in the original takeover attempt by the Okada-aligned group, on Friday it issued that same Okada-led board of TRLEI with a “cease and desist” order and directed them to vacate the casino at Okada Manila and to reinstate the previous board. The order was issued after a decision by the Philippine Department of Justice that disapproved of the way the Okada-led faction took over the resort in response to a decision by the nation’s Supreme Court that threw out rulings of wrongdoing by Kazuo Okada when he was running the property.
Also troubling had been reports that the Okada-led TRLEI board was dispersing funds from the casino cage.
The leadership of PAGCOR had only recently changed when a friend of the new President Fernando “Bong Bong” Marcos Jr. was named president, Alejandro H. Tengco, also a longtime friend of the president.
The Okada situation may have been triggered by some questions about how the dual regulator/operator roles of PAGCOR are conflicting. It’s the only situation in the world where the government both owns and regulates casinos.
Once again, some Philippine lawmakers are pushing for the sale of casinos operated by the state-controlled gaming regulator, citing an inherent conflict of interest.
The Department of Finance has called for new leaders at the Philippine Amusement and Gaming Corp. (PAGCOR) to decide whether they should offload a portfolio of 47 casinos that operate under the Casino Filipino brand. The new regime was appointed by President Ferdinand Marcos Jr., who won by a landslide in May and inaugurated in June. Known as “Bongbong,” Marcos is the only son of the late dictator Ferdinand Marcos Sr. and his wife Imelda.
“PAGCOR’s new leadership will have to make known their plans moving forward,” said Finance Secretary Benjamin E. Diokno last week. “They should resolve the seemingly conflicting roles as an operator and regulator.”
Diokno’s comments followed the announcement of the new board of directors at PAGCOR under Chairman and Chief Executive Alejandro H. Tengco, a long-time friend of the Marcos family.
According to the Manila News, the sale reportedly could reap about $6 billion; those funds would come in handy in the wake of the Covid-19 pandemic.
“We would like the economy to grow … to recover,” Diokno said. “If there [are] additional resources available to us, either through maybe new loans or maybe additional revenues coming from, say, privatization of some corporations, we would be willing to support a supplemental budget.
“If we are ready to implement projects, and we had the money, then better spend it now rather than a year from now.”
Privatization has been on the table since August 2016, when former President Rodrigo Duterte supported a sale to raise funds for the national budget. PAGCOR said it would sell its licenses in 2018, and singled out 17 of the 47 casinos to go on the block first. That plan was shelved, reported Inside Asian Gaming, because the casinos were making so much money. PAGCOR casinos generated GGR of PHP37.1 billion (US$660 million) in 2019.
Some lawmakers oppose a sale, for the same reason: money. “I am strongly against privatizing it,” Philippines Deputy House Speaker Rufus Rodriguez told the Philippine News Agency. “Why kill, or more appropriately, why sell the goose that lays the golden eggs?”
Rodriguez has called for the creation of a dedicated Casino Gaming Regulatory Authority to oversee regulation of Philippine casinos, including the Casino Filipino portfolio, presumably leaving PAGCOR to act only as an operator. “It’s not fair to businessmen investing in casinos. This situation of PAGCOR being a regulator and a player is not conducive to attracting investments,” he said.
New PAGCOR head Tengco has asked for “time to study” the idea. “That is part of our current thrust and agenda, to really distinguish whether we are a regulator or an operator,” Tengco said.
According to GGRAsia, the body saw its net income grow to PHP2.16 billion (US$38.4 million) for the first six months of 2022, compared with net income of just under PHP79.1 million in the prior-year period.
