Faced with increasing competition from privately owned casinos, the Philippines’ state-owned operator acknowledges that the year ahead will be a challenging one.
The Philippine Amusement and Gaming Corporation fell PHP2.4 billion shy of its 2013 revenue goal of PHP42 billion (US$683 million) and will be hard-pressed to make its target of PHP45.4 billion this year.
“We hope to continue PAGCOR’s good performance in 2014,” Chairman and CEO Cristino Naguiat Jr. told the Manila Bulletin. “We know that it will not be easy because competition is getting stiffer. But just like what I keep telling our employees, we always have to do our best so we can reap the fruits of our labor.”
PAGCOR also regulates the country’s gaming industry and earns fees from private casino projects and actively supports the government’s strategy of growing tourism and providing jobs by allowing the commercial sector to expand. The core of that strategy centers on four licenses for integrated resorts approved for a swath of public land on Manila Bay called Entertainment City.
The first of those licensees, Solaire Resort & Casino, opened last March at a coast of US$750 million. The second, Melco Crown Entertainment’s City of Dreams is slated to open this summer at a cost of more than $1 billion. Singly or together they dwarf PAGCOR’s modestly scaled properties, and with privately held Resorts World Manila, the country’s largest and most lucrative casino, raking it in near the capital city’s international airport—its ownership is also one of the Entertainment City developers—they’re expected to take an increasing share of the business formerly dominated by PAGCOR.
As a regulator, PAGCOR is in a tough spot as well vis a vis its relationship with the last of the Entertainment City licensees, Manila Bay Resorts, owned by a subsidiary of Japanese machine gaming magnate Kazuo Okada’s Universal Entertainment.
Universal is under criminal investigation in connection with allegations the company paid bribes to secure government approvals and created dummy companies to circumvent Philippine ownership requirements for foreign investments.
Universal denies any wrongdoing and is proceeding with construction of its resort. But Francis Hernando, vice president for gaming licensing and development at PAGCOR, said Universal’s license may be put on hold until the cases are resolved.
