PHILIPPINES

Philippines puts hold on POGO expansion

Beijing has put Asia’s online gaming industry on notice that it won’t tolerate operations targeting its citizens and the Philippines has taken note.

11In August, the Philippine Amusement and Gaming Corporation said it was suspending the acceptance of applications for new online licenses. The regulator was cited as saying in local media that it needs to “stop first and look at other concerns that we have not met comfortably,” when it comes to Philippine Offshore Gaming Operators (POGOs).

There are currently 58 licensed operations in the country and a further three applications are pending. POGOs have proved a highly lucrative source of revenue for the government and PAGCOR had been actively marketing the Philippines as an online gaming hub.

It expects to generate an additional P8 billion (US$156.5 million) in gaming revenues in 2019, making a total of P20 billion in just three and a half years.

“We will finish the assessments by the end of the year. We don’t want problems,” PAGCOR Chair Andrea Domingo was cited as saying. “We should be able to come up with a viable and good program,” she said.

“We expect to have a little bit of a problem, because of this crackdown. We have to assure them (markets outside Asia) that here, everything is up and above board,” Domingo said.

The announcement followed a strongly worded statement from the Chinese embassy in Manila warning all forms of gambling involving Chinese gamblers, or targeting the mainland, are illegal and will be stamped out.

“The embassy urged the Philippine government to take effective measures to prevent and punish the Philippine casinos, POGOs and other forms of gambling entities for their illegal employment of Chinese citizens and asked the Philippine government to crack down on related crimes that hurt the Chinese citizens,” the statement said.

It went on to say that the proliferation of POGOs employing Chinese was posing a threat to China’s financial security and supervision. It said that a conservative estimate shows hundreds of millions of yuan are flowing illegally out of the country every year through underground banks and funds are being laundered cross border.

It also expressed concern about the thousands of Chinese working illegally for POGOs in conditions described by the media as “modern slavery.”

“Their passports are taken away or confiscated by the Philippine employers. They are confined to live and work in certain designated places and some of them have been subjected to extortion, physical abuse and torture as well as other illtreatments,” it said.

“At the same time, dozens of kidnappings and torture cases of Chinese citizens who gamble or work illegally in gambling entities in the Philippines have taken place. Some Chinese citizens were physically tortured, injured or even murdered.”

Beijing said it planned to step up action to stamp out illegal gambling, but also warned its citizens that if they are gambling overseas they may be committing a criminal act.

“The Judicial Interpretation of the Relevant Laws on the Application of Online-gambling Crimes jointly issued by China’s Supreme People’s Court and the Supreme People’s Procuratorate clearly stipulates that Chinese citizens gambling overseas, opening casinos to attract Chinese citizens as primary customers may constitute gambling crimes.”

Around 138,000 Chinese are estimated to be working in online gambling firms in the Philippines. Concerns have been mounting for months that many of them are not on legal work permits and are not paying the correct taxes.

Manila has stepped up efforts to collect tax and ensure foreign workers have the correct visas, but with limited success. It was a proposal to house the workers in two hubs that finally caused Beijing to lose patience and intervene.

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.”

Okada, which releases monthly gaming figures, said July revenue spiked 48 percent and it’s adding more rooms to accommodate visitors.

Parent company, Universal Entertainment, said several rooms in the Coral Wing (Tower B) were now in operation, which should enable it to attract more customers. It didn’t specify how many rooms it had added.

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. Bloomberry posted a 52 percent jump in Q2 net profit, fuelled by strength in all gaming segments.

Net profit rose to PHP2.45 billion ($47 million) from PHP1.61 billion a year earlier. Total revenue rose 21 percent to PHP11.6 billion, while gross gambling revenue was up 19 percent to PHP14.6 billion.

The company said its VIP volume had declined 5 percent, but a higher hold rate of 3.49 percent helped to boost revenue to 33 percent to PHP6.18 billion.

Conversely, the company recorded its highest level of mass table drop of PHP12.5 billion, up 14 percent, though revenue declined 3 percent due to lower hold of 32.6 percent from 38.3 percent a year earlier.

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.

Formerly, the Melco group’s key revenue driver, the property reported lacklustre Q2 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.

The company blamed increasing competition for the declines.

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.

For Q2, Travellers reported a 52 percent drop in net profit as costs rose and a onetime gain reported last year wasn’t repeated, though revenue growth was strong.

Net profit was PHP599.2 million ($11.4 million), down from PHP1.24 billion the prior year. The company posted a gain from other income of PHP1.47 billion last year, compared with none in this quarter. Net revenue jumped to PHP6.72 billion from PHP4.68 billion in the same quarter of 2018.

Suncity opens RWM VIP club

Suncity Group held the soft opening of a new VIP club at Resorts World Manila on August 15. The Resorts World Manila Suncity VIP Club is located on the 2nd floor of Grand Wing Building of Resorts World Manila, offering a total of 5 salons and 22 tables.

Suncity, Macau’s largest junket operator, already has VIP clubs in Melco Resorts & Entertainment’s City of Dreams Manila, Bloomberry’s Solaire Resort & Casino and Universal Entertainment’s Okada Manila.

Travellers to delist from PSE

Travellers International Hotel Group says it plans to delist its shares from the Philippine Stock Exchange to avoid disclosing its business strategy to competition. The operator of Resorts World Manila will be the second gaming stock to delist in the Philippines after Melco Resorts & Entertainment’s local unit.

Travellers said it will make a tender offer for more than 1.58 billion shares. It said the offer is conditional of receiving tenders from more than 825 million shares held by investors not linked to the group. After the offer, at least 95 percent of outstanding shares will be held by non-public shareholders, which include Alliance Global and Megaworld.

“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.