RWM saw slight dip in GGR
As the market in Macau slides into recession, another gaming jurisdiction in the region is booming. The Nikkei Asian Review reports that Travellers International Hotel Group, which owns Resorts World Manila, doubled its net profit to 5.45 billion pesos ($121.6 million) in 2014. Bloomberry Resorts, which operates the Solaire Resort & Casino, saw a net profit of 4.07 billion pesos (US$271 million), a dramatic change from its opening year, 2013, when it reported a net loss of 1.32 billion pesos.
Despite the overall increase in profits, Resorts World’s gaming revenues dropped 5 percent to 28.41 billion pesos. Analysts say the decline was due in part to new competition from Solaire, and also due to the resort’s move away from VIP players. The emphasis on mass-market play, however, has helped to shield the market from catastrophic losses such as those seen in Macau and Singapore. Meanwhile, Solaire’s gross gaming revenues doubled to 30.39 billion pesos.
At the February grand opening of City of Dreams, Melco Crown Co-Chairman and CEO Lawrence Ho affirmed that the target customer for the Manila resort is “first and foremost the domestic market,” followed by VIPs from other Southeast Asian countries and visitors from South Korea.
“Overall, I think the industry is growing,” said AB Capital Securities analyst Alexander Tiu. “The next thing we have to see is how will City of Dreams Manila affect competition. Will it divide the pie or enlarge the pie?”
City of Dreams opened at Entertainment City in February. The $1 billion casino resort has 380 gaming tables, 1,700 slot machines and 1,700 electronic gaming tables.
According to the Review, the country hopes to overtake Las Vegas as the world’s No. 2 gaming destination after Macau.
Two more megacasinos are planned for Manila Bay: one from Travellers, and one from Kazuo Okada’s Universal Entertainment. The latter resort was originally slated for completion this year, but the Philippine Amusement and Gaming Corp just granted a two-year extension to Universal, which has said it will invest an additional US$700 million extra on the resort and increase its gaming area by 97,000-square-meters (1.04 million square feet).
Okada’s Universal Entertainment has been investigated for corruption in the Philippines, Japan and the United States, but the company has announced that the probe in the Philippines is over. According to GGRAsia, Okada made the announcement in a filing to JASDAQ, and added that the company expects related inquiries in the U.S. to be closed for “lack of evidence.”
“We are pleased to announce that all inspections or investigations by government-related bodies?of the group and its officers and employees in relation to the groundless suspicion?have thereby concluded for all practical purposes in the Philippines just as all investigations in Japan have concluded,” the company stated.
At the center of the controversy is the US$2.7 billion Manila Bay Resorts casino project, now under construction in Entertainment City and expected to open in 2017. According to CalvinAyre.com, Universal’s local subsidiary was accused of paying millions to gaming regulators to advance the casino project. Reuters reports that tax officials in Japan are also reviewing the matter, including $40 million in payments made in 2010 to Rodolfo Soriano, an associate of the then-head of the Philippine gaming regulator. Universal has repeatedly denied allegations of bribery and corruption and said the payments were made by former employees acting independently.
Okada was Wynn Resorts’ biggest single shareholder until 2012, when the allegations surfaced. At that point, the U.S.-based company forcibly bought out Okada’s 20 percent stake at a discount.
The grand opening of Manila Bay Resorts has been pushed back to the first quarter of 2017, according to Innovategaming.com. Okada has expanded the initial plan, and will reportedly spend an additional $700 million on the project and increase gross floor space by 97,000 square meters. The changes will result in “additional guest rooms and parking area,” noted Jorge Sarmiento, PAGCOR president and COO, “ and would also contribute to the strengthening of the structure and architectural design.” The total investment now stands at approximately US$2.7 billion.
At the same time, the state of Mississippi in the U.S. has renewed Okada’s gaming license, provided that a Federal Bureau of Investigation probe into Universal’s activities in the Philippines comes up clean. Allen Godfrey, executive director of the Mississippi Gaming Commission, told Reuters that the allegations about Okada were “very concerning to me, but until there is something I can hang my hat on I can’t act.”
Universal has said it would not face charges in the U.S. “as long as a fair and proper investigation is conducted.” The company manufactures the Aruze brand of slot machines and devices.
