Credit Suisse: B market by 2018
A Philippine lawmaker has sponsored a bill that would finally require the country’s gaming regulator to relinquish its role as casino operator.
The push by Senator Panfilo Lacson echoes other recent calls to make the Philippine Amusement and Gaming Corp. a regulatory body only. Last summer the country’s Department of Finance announced a plan to strip PAGCOR of its right to operate public sector gaming halls, a portfolio that includes eight casinos and 36 satellite sites.
And in May, local media reported that the government of President Rodrigo Duterte would begin accepting bids for PAGCOR’s casinos before the end of the year. Duterte himself has ordered PAGCOR to reorganize in order to make the Philippines “the top gaming and entertainment destination” in Southeast Asia and not be distracted by running its own gaming halls.
“In order to promote a level-playing field in the gambling industry and avoid conflict of interests, PAGCOR should cede its role as operator of all gambling and gaming activities,” reads Senate Bill 1471. “Through such manner, it can focus and put premium to its regulatory authority, which is its governmental role.”
Lacson’s bill mandates that PAGCOR casinos must be privatized within 12 months of the law’s passage. Proceeds from the sale of the gaming assets would go to the Bureau of Treasury for appropriation by the Philippine Congress, reported Focus Gaming News.
The bill would also consolidate PAGCOR’s authority to regulate new gaming products, premises and technologies, including online gaming.
The plan is endorsed by Speaker of the House of Representatives Pantaleon Alvarez, who urged legislators in the House to introduce a similar amendment.
Philippines Finance Secretary Carlos Dominguez said there hasn’t been a great clamor among gaming companies looking for new licenses, but added, “People will come. We will make it attractive.”
The problem with PAGCOR’s dual responsibilities may be best illustrated by its casino in Cebu City, where real estate developer Dennis Uy—a Duterte intimate—is building what will be the largest commercial casino and first integrated resort outside Manila. Clearly Uy could claim a conflict in the market if the regulator of his property also owned a separate, competitive property in the same city.
Revenue from PAGCOR’s casino operations for the first quarter of 2017 came to $284.3 million, of which 50 percent went to the federal government and 5 percent of what it claims in franchise taxes to local cities. On a quarterly basis, PAGCOR pays P15 million (US$300,000) to the country’s Dangerous Drugs Board.
Credit Suisse has predicted that gaming in the Philippines could generate up to $6 billion a year by 2018.
