PHILIPPINES

Clark, Cebu spark investor interest

While the Philippines’ online industry has been the focus of attention in recent months, the country’s land-based sector has been making steady strides, with the opening of a new resort near the Clark Freeport Zone and progress in Cebu.

The $250 million D’Heights Resort & Casino held its soft opening in July and promises to be one of the largest integrated resorts in the Philippines, with 309 hectares of land spanning the mountain ranges to the west of the zone.

Owned by Dong Huang Clark Corp, the casino opened with 50 initial gaming tables and 576 slot machines. It will hold a grand opening in October, when the number of tables will double.

The gaming area is spread over four floors and will have a VIP floor, to be known at the D’Heights Club.

Albert Pascual, D’ Heights Resort and Casino’s business development manager says the property will also include an indoor water theme park, a man-made lake, villas, condominium towers, the Singapore International School, a 36-hole golf course, restaurants, dutyfree shops, as well as commercial establishments.

The Hilton will be the first of several luxury hotels on the site, with 310 rooms and a Hyatt Regency hotel is also part of the plans.

Philippine Amusement and Gaming Corp. (PAGCOR) Chair Andrea Domingo has said she doesn’t want to see any further casino development in Manila, but she has stressed that she is in favour of casino hubs in areas such as Clark and Cebu.

President Rodrigo Duterte imposed a ban on issuing new licenses in 2018 amidst concern about over expansion in the industry, although his spokesman has recently suggested he may be softening his stance.

During his fourth State of the Nation Address, Duterte praised Domingo for collecting P16-billion ($313 million) revenue as of July 2019. He also urged Domingo to encourage more gaming.

Asked if Duterte is now open to lifting the moratorium, Presidential Spokesman Salvador Panelo said: “That would be the logical consequence of what he said.”

The D’Heights resort joins five other casinos at Clark Freeport: Midori, Royce, Widus, Mimosa Pagcor and the newly-opened Fortunegate Casino at Hotel Stotsenberg.

Widus Philippines in September announced it has obtained its first regular gaming license from PAGCOR, replacing a provisional license granted in 2014.

The Hilton will be the first of several luxury hotels on the site, with 310 rooms and a Hyatt Regency hotel is also part of the plans.

Widus President and Chief Executive officer Daesik Han said the authorization was “a solidified acknowledgment of the government’s trust and confidence for the company’s competency and compliance.”

The Widus Casino has 67 tables, 358 slot machines, and 28 ETGs.

Elsewhere, Hong Kong-listed Landing International, which had been planning a $1.5 billion casino in Manila, is now on the lookout for another plot of land after its prior lease agreement was declared void.

The company said its provisional casino license requires proof of land ownership, or the lease of land, in order to move ahead with its planned development. The company was holding a groundbreakingceremony for its project in 2018 when the government pulled the rug, citing irregularities with its lease contract.

The company has been given 180 days from September 10, 2019 to secure the new piece of land, though it’s unclear whether it is still focused on Paranaque City, which was the original site for the resort.

On the island of Cebu, which has also been a focus for IR investors, projects are moving ahead.

PH Resorts Group’s The Emerald Bay Resort & Casino is scheduled to open in 2020. The five-star property was designed by Steelman Partners. In Phase 1, the property is expected to have 400 rooms with 100 tables and 600 electronic gaming machines.

In an interview on the sidelines of the firm’s annual stockholders’ meeting in Pampanga province in May, PH Resorts President Raymundo Martin Escalona said his company could borrow as much as 70 percent through its subsidiaries, and raise 30 percent from equity to finance the $600-million Emerald and another $250-million resort planned for Clark.

In September, Gokongwei’s Universal Hotels & Resorts, was also reportedly granted planning permission by Cebu City for its Isla dela Victoria IR.

CEZA freezes crypto currency exchange licensees

The Cagayan Economic Zone Authority (CEZA) has frozen all crypto currency exchange licensees until mid-2020 after an alleged investment scam involving a Chinese company.

CEZA said the suspension would remain in place until a new facility in the zone is completed and can house all the firms in one place, allowing easier oversight.

Currently, license holders are being permitted to operate in metro Manila. “We decided to prohibit not only GMQ but all registered OVCEs from operating until the fintech hub building in CEZA is ready to accommodate these companies in mid-2020,” CEZA spokesman Mike Gerald David was cited as saying.

“We see this as a preventive move to deter other fintech companies from doing fraudulent activities. Once they are all gathered in a single building, it will be easier for us to monitor their activities.”

Union calls for new POGO oversight body

The Trade Union Congress of the Philippines (TUCP) has called on the government to create a new body to coordinate the regulation of offshore online gambling in the country.

The TUCP said it is concerned even more Chinese workers will flood into the Philippines after Cambodia banned online gambling. Manila has suspended issuing new licenses but has not banned Philippine Offshore Gambling Operators (POGO’s), which are an important source of revenue for the country.

The TUCP said government agencies have limited authority and they cease to function on areas beyond their mandate.

The idea of the coordinating body would be to ensure that POGOs do not fall between the cracks between various ministries seeking to control elements of the business, such as taxation and immigration, as well as gaming regulation, which is handled by the Philippine Gaming and Amusement Corp.

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.

Travellers recently announced it plans to delist from the Philippine Stock Exchange, via a tender offer for more than 1.58 billion shares. It said the offer is conditional on receiving tenders from more than 825 million shares held by investors not linked to the group.

“The conversion from a public entity into a private company will allow the company to timely address evolving market demands and rapidly changing customer needs without compromising its business strategies to competition,” it said in a stock exchange statement.

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, an additional ten VIP gaming salons with 66 gaming tables and 223 slot machines.

The company is now planning a second integrated resort in Quezon City to be known as Solaire Metro North. Bloomberry plans to break ground this year, with a target for opening in 2022.

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.

According to a note from Bernstein Research, the firm stopped proxy betting at the resort as of July.

For Q2, Melco noted that greater competition in the Philippines ate into results.

Revenues edged higher to $176.1 million compared to $173.9 million, while adjusted EBITDA slipped to $82.8 million from $87.3 million in the comparable period of 2018.

Rolling chip volumes totaled $1.9 billion down sharply from $3.0 billion in the second quarter of 2018. Mass market table games drop decreased to $192.8 million from $196.9 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 spans 44 hectares and at the completion of Phase One, Okada will have 994 hotel rooms and operate 500 tables and about 3,000 slots. Its centrepiece is the world’s largest coloured fountain, as well as a giant inner city beach complex, known as “Cove Manila.”

Universal Entertainment announced that Okada Manila saw a rise in gross gaming revenue in August 2019, driven by a boost in its VIP business.

VIP table games revenue went from P790 million to approximately P2.0 billion in August 2019, a more than 150 percent increase year-on-year.

Mass table games and gaming machine revenue also showed strong growth in the month, rising 27.7 percent and 33.9 percent respectively.