PHL seen making all the right moves in gaming
MACAU -- The Philippines has a long way to go before matching Macau as a gaming and entertainment hub, but analysts said the country is making the right moves in building significant momentum for the industry’s growth.
“I think the Philippines is probably one that comes to mind, first, simply because we are seeing decent amount of growth in inbound Chinese volumes, but the real exciting part there is the local story, the local economy, its going to so well. So you’re seeing the gross gaming revenue story in the Philippines get better and better and better, and it’s not dependent on Chinese entirely, so that’s interesting,” said Grant Gouvertsen, Union Gaming Group’s managing director during a forum here.
However, Mr. Gouvertsen told BusinessWorld later on that the Philippines won’t reach Macau’s gaming revenues anytime soon as it still needs to improve its infrastructure.
“I don’t think they’ll ever going get to where Macau is. I think there is a need for significant infrastructure improvement. It’s elevating the tourism experience in general,” he said in a chance interview.
He added that improved infrastructure would also attract more foreign players into the gaming industry, which would further bolster gross gaming revenue growth in the country.
The government’s policy is centered on ramping up infrastructure and social spending -- spending P8.4 trillion over the medium term -- in order to attract more investment and boost productivity which it hopes to generate economic growth of 7-8% starting next year until 2022.
Mr. Gouvertsen added that the Philippine Amusement and Gaming Corp.’s (PAGCOR) plan to bid out its casinos would not only clear conflicts of interest between regulator and operator, but would also spur improvement in existing casinos.
“However the sale of the PAGCOR assets will be very helpful. Under private ownership the existing PAGCOR casinos will likely generate more revenue and generate more taxes.”
Finance Secretary Carlos G. Dominguez III said earlier that it would sell its assets to private bidders within this year as PAGCOR-run casinos can no longer compete with the private sector. The government is currently valuing the casinos in preparation for an auction.
PAGCOR currently operates 11 casinos nationwide with two of those in Metro Manila, according to its website.
Meanwhile Praveen Choudray, managing director of Morgan Stanley, expressed positive hopes for the gaming industry in the Philippines.
“I do agree that the Philippines looks like the market to look for. I think the gambling appetite in Asia is still humongous, as long as you can build casinos, integrated resorts, entertainment around that, good food, I think that’s an easy bargain. I think you can keep getting more and more out of it. I will not be surprised if I hear more success in the future,” he said in the same forum.
Mr. Choudray also said later on in a chance interview that the Philippines is doing “all the right things” in terms of proper regulation, and in terms of its top casinos efforts to generate billions on revenue.
The country’s top integrated resorts include Travellers International Hotel Group’s Resorts World Manila, Bloomberry Resorts Corp.’s Solaire Resorts and Casino, Melco Crown and Belle Corp.’s City of Dreams Manila and Tiger Resorts’ Okada Manila.
The Razon led Travellers International Hotel group plans to put up its Entertainment City arm called Resorts World Bayshore, which is expected to inaugurate next year. Malaysia’s Genting Group meanwhile plans to set up its own integrated resort called Westside City and is expected to complete construction by 2020.
Casinos in entertainment city recorded billion-peso profits in 2016 with Resorts World recording a P3.4 billion net profit, Solaire booking P2.32 billion and City of Dreams posting $491.2 million in the same year.
Mr. Gouversten said that the country should continue its focus on the gaming industry.
“Ultimately this is a 20-year dream. Fill out Entertainment City with more integrated resorts,” he said.
However he added that the country should also take a look at how it is taxing the gaming industry.
“You need to keep it low enough to incentives casino operators to bring players there, rather than go somewhere else where tax rates are lower,” he said.