- Gaming agency plans offshore betting restricted to foreigners
- Regulator may issue casino licenses outside capital city
The Philippines’ state-owned gambling regulator is targeting the overseas online gaming market for more business after the agency’s crackdown at home threatens to shrink revenue.
The Philippine Amusement & Gaming Corp., or Pagcor, will soon start issuing online gambling licenses restricted to foreigners, Andrea Domingo, head of the agency, said in an interview. It also plans to issue casino licenses outside the capital and sell the more than three dozen gambling dens it owns either in whole or in a partnership as the government “rationalizes” the industry and considers exiting the casino business, she said.
“It’s 100 percent money. This is going to augment our revenue without breaking any of the pronouncements of the president not to have Filipinos get into the gaming habit,” Domingo, who assumed office in July, said in Manila.
President Rodrigo Duterte, who took office at the end of June, vowed to “destroy” online gaming in a campaign that has sent shares of the Southeast Asian nation’s gambling companies from PhilWeb Corp. to Leisure & Resorts World Corp. reeling. He has since softened his stance this week, saying he may reconsider provided they pay the right taxes and follow the prescribed zoning rules.
An "offshore betting" platform could make up for the estimated 10 billion pesos ($216 million) in annual revenue Pagcor may lose amid the shakeup in the local industry, Domingo said. The agency, which also operates casinos, is targeting to double earnings in six years to 100 billion pesos. The global online gambling market is currently worth around $37 billion a year, according to the American Gaming Association.
Pagcor’s overseas push is an added blow for Leisure & Resorts, whose electronic casino cafes have been shut while its online bingo operations are facing non-renewal. The company is engaged in overseas online gaming through a unit that issues and regulates licenses in the Cagayan Special Economic Zone and Freeport. Shares of Leisure & Resorts fell 2.3 percent as of 10:22 a.m. in Manila, after earlier dropping as much as 6.2 percent.
Pagcor this month decided not to renew PhilWeb’s license to supply it with electronic games and rejected an offer by the company’s former chairman Roberto Ongpin to give 49 percent of PhilWeb to the state agency. Duterte singled out Ongpin in a campaign to end the influence of big businesses on the government.
Shares of PhilWeb rose 26 percent on Friday, poised for the steepest three-day gain since August 1999. The stock jumped 50 percent yesterday as the company said it will seek a new permit after Duterte indicated he’s open to resume online gaming.
“The government’s policy shift is to shield those who are economically vulnerable from the negative effects of gambling," said Astro del Castillo, managing director at First Grade Finance Inc. “At the same time, it recognizes that if handled right it can bring investments and help boost the government’s tourism push."
Pagcor is considering charging a one-time $200,000 for an online gaming license, a fee of $10,000 per table a month and a $100 per slot machine player, Domingo said. Licensees must also put up a $250,000 cash bond, she said.
Pagcor may issue casino licenses outside Manila, where it has already allowed four casino resorts in a 120-hectare seaside Entertainment City complex with a minimum investment of $1 billion each, Domingo said.
Pagcor is also preparing a valuation of the 46 casinos it operates for their eventual sale, Domingo said. Finance Secretary Carlos Dominguez has said the government may decide to close or sell business operations of state agencies with both regulatory and commercial functions.
“Pagcor’s move to sell its gaming operations and stay as regulator is a step in the right direction as this will take away potential conflicts of interest," said Rommel Rodrigo, a gaming analyst at Maybank ATR Kim Eng. “The government will get the highest value if these casino are sold as one rather than if the assets are sold separately. Bundled as one, these casinos will give buyers a massive advantage."