RWM rising, despite gunman attack
Gross gaming revenues from the Philippines’ four integrated resorts could expand by 32 percent this year, according to brokerage Morgan Stanley.
In to a note to investors, brokerage Morgan Stanley said revenues will get a lift from Okada Manila, which staged a soft launch in December 2016 and has been adding facilities ever since.
“Mass revenue growth has strong correlation with hotel room supply growth,” wrote analysts Alex Poon and Praveen Choudhary. “The opening of Okada Tower A in first-quarter 2018 could accelerate market growth in 2018.”
The Philippine gaming market strengthened in 2017 due to warmer relations between Beijing and Manila, with Chinese VIPs in abundance despite the 2017 arson attack on Resorts World Manila that led to the deaths of more than 30 people including the gun-toting assailant, described as a disgruntled gambler.
Data from the brokerage showed VIP revenue in the Philippines totaled US$1 billion in 2017 and could grow with the growth of Macau junket operators bringing high rollers to the IRs. Mass GGR is also on the upswing, rising 29 percent last year, according to Morgan Stanley. Okada’s GGR will increase 22 percent in 2018, the analysts estimated, while the other IRs could experience revenue dips.
Manila’s Entertainment City includes three integrated resorts: Bloomberry Resort’s Solaire Resort and Casino, Melco Resorts & Entertainment’s City of Dreams Manila, and Okada Manila. A fourth, Genting Group’s West Side City Resorts World, is expected to open in 2020.
Risk consultancy Steve Vickers Associates said in its 2018 risk assessment that the economy in the Philippines was one of the strongest in Asia last year, expanding by 6.7 percent. The World Bank expects a slight softening to 6.6 percent in 2018.
“The political and security situations in the Philippines pose significant risks to investors, but have yet to unbalance the economy. Investors should monitor the situation closely—and be ready to respond,” the report found.
Malaya Business Insight reports that the government may consider levying casino entrance fees to pay for government infrastructure programs. Two bills filed in the House of Representatives propose rates for locals ranging from P3,000 (US$60) to P3,500 ($70).
“Based on the 5.56 million annual average number of local entrants of licensed casinos and PAGCOR-operated table games and slot machines from 2014-2016, the mandatory imposition of the qualifying fee of P100 in all casinos would generate P556 million revenue for the government,” the report said, adding that the collection of higher qualifying fees “could be a practical way to discourage those who do not have enough money to spend in casinos.” The current entry fee of P100 ($2) has been unchanged for two decades.
A plan to sell off state-owned casinos now operated by PAGCOR should be complete in “a few months,” Carlos Dominguez, the Philippines’ Finance Secretary, told the Manila Bulletin newspaper. “Basically, the goal is to separate the operating function of PAGCOR from its regulatory function.”
In August 2016, citing an inherent conflict of interest, the Philippine Department of Finance announced its plan to strip PAGCOR of its right to operate casinos. Seventeen gaming halls are set to be sold in the first round of disposals, which Dominguez indicated would begin this year. PAGCOR now operates eight Casino Filipino-branded properties and 34 so-called “satellite” sites.
Meanwhile, Travellers International Hotel Group, Inc. and Hotel Okura Co., Ltd. have finalized an agreement to operate Hotel Okura Manila with a soft opening targeted in the fourth quarter of 2018, says Resorts World.
“The Philippines, especially Manila, is a very promising market considering the nation’s gross domestic product and population size, both of which are growing fast,” said Toshihiro Ogita, Okura president. “The local hotel business is benefiting from these and other favorable trends.”
The company also announced the opening of hotels in Phnom Penh and Ho Chi Minh City in Vietnam, Yangon in Myanmar and Taichung in Taiwan for a total of 100 properties worldwide.
