PHILIPPINES

Regions help power GGR growth

The Philippines was once again the best-performing market in Asia last year, with an impressive contribution from regional casinos, as well as the increasingly well-established integrated resorts in Entertainment City.

Overall gross gambling revenue rose 15 percent to PHP248.46 billion, according to figures from the regulator, the Philippine Amusement and Gaming Corp (PAGCOR).

The four Manila IRs contributed the lion’s share, reporting revenue of PHP165.2 billion, up almost 17 percent on the prior year period. However, it was the developing casino cluster in Clark that registered the strongest growth, jumping almost 41 percent, with regional resort operator Thunderbird also turning in a healthy gain of 27 percent.

The Clark Freeport Zone now has six operating casinos, with at least a further two properties in the works. The D’Heights casino held a soft opening in July last year, boasting 309-hectares spread over a mountainous site to the west of the zone. The luxury resort features four gaming floors and a Hilton Hotel, being the first of several to open its doors.

The D’Heights joins the Widus Casino, the Casino Filipino Mimosa, the Midori Clark Hotel, the Royce and Fortunegate.

Almost the size of Singapore, Clark occupies over 33,000 hectares of prime land located in Central Luzon. A former U.S. airport base, the area is now being promoted as hub for tourism, MICE and business investment, in particular as an alternative to the crowded and polluted capital.

Transport links have been improved, including flight connectivity, making the area more easily accessible. It is just 3 ½ hours flying time away from Hong Kong, Taiwan, Singapore, Japan and Korea, the latter being the main source market for the region.

In February, Widus Group unveiled details of a rebranding of its properties in the area, to create a new lifestyle brand -- Hann Resorts, which will be the umbrella for the Hann Casino Resort in Clark and the new PHP12 billion Hann Lux Resort in New Clark City.

Almost the size of Singapore, Clark occupies over 33,000 hectares of prime land located in Central Luzon.

The company signed an accord last year with the Bases Conversion and Development Authority (BCDA) for the creation of the luxury property. Phase 1 will involve investment of PHP5 billion and is scheduled to open within five years, including the development of an Angsana Hotel and the Banyan Tree Hotel, as well as an 18-hole championship golf course, and a clubhouse.

Phase 2 includes the development of Westin and Luxury Collection by Marriott, two 18-hole championship golf courses, outdoor recreation facilities, premium villas and residences, a mixed-use commercial center, and a 10-hectare public park for a total investment of PHP7 billion.

Australia’s Frontier Capital, which operates the Hotel Stotsenberg in the zone, also announced recently that the reopening of its casino there had helped the group return to profit in 2019. The company secured regulatory approval to reopen the FortuneGate Casino, formerly known as the Casablanca, following a shutdown due to compliance failings.

Revenue from the country’s casinos helped boost PAGCOR’s coffers by 11.6 percent last year, to PHP75.8 billion, despite a moratorium on new online licenses.

The amount exceeded PAGCOR’s 2019 target by P1.3 billion.

PAGCOR said this was mainly a result of gaming revenues from slot machine operations, electronic bingo, table games operations, regulatory fees from its POGO sector, and fees from licensed casinos.

Meanwhile, the Philippine government has resisted pressure so far to put an all out ban on its lucrative online gaming industry despite pressure from Beijing, which nonetheless is making it clear it has not abandoned its efforts. According to local media reports, the Chinese Embassy in the Philippines has claimed it has a list of all workers for Philippine Offshore Gambling Operators (POGOs) in the country and is threatening to cancel their passports.

Such a move could lead to the mass deportation of thousands of POGO workers.

Belle 2019 net profit falls

Belle Corp posted a 9 percent decline in net income in 2019 to P2.9 billion ($57 million), driven mainly by a drop in consolidated revenues.

Belle said its overall operating performance was affected by weaker results at Pacific Online Systems Corporation, which leases online betting equipment to the Philippines Charity Sweepstakes Office (PCSO) – revenue from Pacific Online fell 49 percent in the year, due to competition from small-town lottery and temporary suspension of PCSO and keno operations in the third quarter of 2019.

Belle Corp’s principal asset is the City of Dreams Manila in Entertainment City, which is being leased on a long-term basis to Melco.

The company, however, reported a lower share in gaming earnings at City of Dreams Manila, down 7 percent to P2.98 billion in 2019.

City of Dreams

The $1.3 billion City of Dreams Manila is owned by Belle Corp and Melco Crown Entertainment’s local unit. City of Dreams Manila has six hotel towers with approximately 950 rooms in aggregate, including VIP and five-star luxury rooms and high-end boutique hotel rooms, a wide selection of restaurants and food & beverage outlets and a 4,612.44 square meters family entertainment center in collaboration with Dreamworks Animation.

For Q4, Melco reported a decline in operating revenue for the property to $153.5 million from $155.2 million a year earlier. Adjusted EBITDA fell to $53.9 million from $67.9 million, which the company attributed to softer performance in the rolling chip segment, partially offset by better performance in the mass market table games and gaming machines segments.

With increased competition in the market, City of Dreams Manila’s rolling chip volume was $2.02 billion in the fourth quarter of 2019 versus $2.38 billion in the fourth quarter of 2018. Mass market table games drop increased to $216.3 million compared with $197.3 million.

Tiger Resort Leisure and Entertainment

Okada Manila, owned by Japan’s Universal Entertainment, is the largest resort in Entertainment City and the last to enter the market, with a soft opening in 2016. The property is seeing a strong ramp up with Universal reporting a jump of almost 46 percent in net sales for last year. The company said visitation in Q4 was strong and hotel occupancy is high. It is now working on adding extra hotel capacity. Construction on the Coral Wing (Tower B) is nearing completion and will add a further 993 rooms, making it the largest hotel in Entertainment City. In its Q4 results statement, the company said it expects to see further strong growth, with VIP helped by adding new junkets. Though its January sales numbers showed a slowdown as the impact of Covid-19 began to bite, particularly in VIP. Universal is preparing to take its local unit, Tiger Resort Leisure and Entertainment public to help accelerate its expansion.

Resorts World Manila

Travellers International Hotel Group, a joint venture between Genting Hong Kong and Alliance Global, is the owner and operator of Resorts World Manila. The hotel room count for the group’s three hotels (Maxims Hotel, Remington Hotel, and Marriott Hotel Manila) remains at 1,226. The property is currently in the third phase of its expansion, which will add approximately 940 rooms. It will also include new gaming and retail spaces.

In February, the company announced a 20-year lease accord with a Suncity Group unit and Westside to develop and operate its casino hotel. The agreement comes as part of moves by Suncity to operate a casino in the Philippines, which began in October last year when Suncity acquired a controlling stake in SunTrust for the rights to build a five-star hotel with at least 400 rooms, a casino with 400 gaming tables, and 1,200 slot machines for both mass and VIP markets, and a 960 space parking lot.

Under the lease agreement, Suntrust will pay an annual rental fee of US$10.6 million, commencing on the first day of commencement of the casino and payable in two installments on a semi-annual basis.

Bloomberry Resorts

Bloomberry Resorts’ Solaire was the first IR to open in Entertainment City and is a 16-hectare integrated resort. The Bay Tower of Solaire consists of a casino with an aggregate gaming floor area of approximately 18,500 square meters (including 6,000 square meters of exclusive VIP gaming areas), with about 1,400 slot machines, 295 gaming tables and 88 electronic table games. The Sky tower consists of a 312 all-suite hotel, additional ten VIP gaming salons with 66 gaming tables and 223 slot machines.

APE enters lease accord with Cebu casino

Asia Pioneer Entertainment Holdings has announced that it has entered into an agreement with Glimex Inc. of the Philippines to lease electronic gaming equipment for use at Palace Casino, located at JPark Island Resort in Cebu the Philippines, for a term of 24 months.

APE will place up to 86 units of electronic gaming equipment at the casino on an operating lease basis, and will receive a variable rental income equivalent to 22.5 percent of the net performance on a quarterly basis. This agreement expands upon the existing 24 units APE supplied to Glimex in December 2018.

Tony Chan Chi Lun, CFO of APE Holdings stated, “This is a strategic move for APE to scale our operating leasing business in Asia.”