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Outlook still bright, despite license moratorium, POGO suspension The Philippines continues to be one of Asia’s fastest-growing gaming markets, with strong tourism arrivals and a growing domestic economy underpinning revenue streams.
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ver the past five years, gaming revenue has risen at a compound average rate of 12.8 percent, second only to Cambodia, where growth has surged 33.8 percent. One restricting factor in the Philippines has been the attitude of the government under President Rodrigo Duterte, who has been circumspect about allowing further expansion. On the land-based side, he put a moratorium on new casino licenses in March 2018, although recent comments from the presidential palace have indicated he may be softening his stance. On the i-gaming side, the Philippine Amusement and Gaming Corp. (PAGCOR) has suspended the issuance of Philippine Offshore Gaming Operator (POGO) licenses pending a clean up of the sector amidst reports of tax avoidance, illegal workers and increasing gaming-related crime. So far, however, the government has resisted pressure from China to impose an all out ban. The focus section of this edition of Asia Gaming Briefings is dedicated to this exciting market, which is now snapping at the heels of Singapore as the secondbiggest in Asia. Our first series of articles profiles Manila’s four integrated resorts, which kick started gaming growth in the Philippines.
Asia Gaming Briefings | August 2019
Travellers International Hotel Group’s Resorts World Manila is the grand dame of the Manila properties opening up in 2009. That was followed in 2013 by the debut of Bloomberry Resorts’ Solaire Resort and Casino, which was the first in the Entertainment City zone of the capital. Next came Melco Resorts & Entertainment’s City of Dreams Manila in 2014, while the latest to make its entrance is also the largest, Universal Entertainment’s Okada Manila. These resorts have had a major impact, with annual growth in gross gaming revenue of about 17 percent during the opening cycle from 2012 to 2016, according to Union Gaming research. That compares with growth of just 4 percent for PAGCOR-operated casinos. However, competition is heating up around Asia, with multiple luxury properties sprouting in Cambodia and Vietnam and further expansion planned for Singapore. We therefore look at whether the Philippines can retain to keep its edge and what needs to happen to retain its growth trajectory. Although much of the attention has been focused on Manila’s IRs, there has been considerable development in regional locations of the country. In fact, PAGCOR Chair Andrea Domingo has made it clear she would like to see the development of other regional entertainment hubs to help develop tourism in other parts of the country. We take a look at some of the progress, with Clark and Cebu leading the way when it comes to new properties and investment plans. Lastly in this section we throw the spotlight on i-gaming. As the only jurisdiction in Asia to regulate i-gaming, the Philippines has seen an influx of firms from all over the globe, but mainly from Mainland China. The entry of so many Chinese is seen as one of the major factors propping up Manila’s real estate market, but it has also pushed up prices in general and created tensions with the local population. One solution that has been put forward to help monitor the activities of the POGO firms, in particular the Chinese, is to create two high-tech hubs to house them. The argument goes they will be easier to regulate if they are grouped together. We look at the plans and ask whether they provide a workable solution when it comes to controlling the sector.
