The Philippine Amusement and Gaming Corp. (PAGCOR) will sell off its portfolio of casinos by the end of 2024, according to PAGCOR Chairman Alejandro Tengco. Officials have criticized the regulator for both owning and overseeing the operations of casinos in the country, calling it a clear conflict of interest.
The licenses are the most valuable assets, as PAGCOR leases all of its casino properties, some of which operate under the Casino Filipino brand.
PAGCOR believes the timeline will increase the value of the 41 gaming licenses, AGB reported.
However, analysts already suggest that the regulator could price itself out of a sale, and the plan could be complicated by the shift of domestic players from PAGCOR casinos to integrated resorts in Manila and Clark.
In a May 16 investor note, Maybank Securities analyst Miguel Sevidal said casinos in Manila’s Entertainment City have seen their share of the market rise from 70 percent in early 2018 to 80 percent in the first quarter of 2023, while business in Clark has risen from 5 percent to 12 percent during the same timeframe.
Meanwhile, PAGCOR casinos’ market share has fallen from 24 percent in the first three months of 2018 to just 8 percent to April 2023.
“This suggests some movement by domestic players from PAGCOR’s Casino Filipino outlets to the integrated resorts, and is consistent with our observation of Entertainment City’s increasing wallet share in recreation and entertainment spending by locals,” Sevidal said.
As a whole, the Philippine gaming industry is flourishing, with total GGR up 107 percent year-on-year and 21 percent quarter-on-quarter in the first three months of the year. Compared to 2019, Entertainment City GGR is up by 38 percent and Clark by 193 percent, IAG reported.
“We retain our positive view on the Philippine gaming sector following 1Q23 results, which showed sustained industry GGR growth … outpacing the growth of state-run casinos,” Sevidal said.
