Philippines - Philippines rides the lucrative gaming wave

The Philippines may not be able to match Macau’s gaming strength, what with the former Portuguese colony building almost its entire economy around casinos, but the country is still seeking to make gaming one of its pillars of tourism and employment generation in the near to medium term.

The state-run Philippine Amusement and Gaming Corp. (Pagcor) is actually expecting the Entertainment City along the Manila Bay to start operating by the last quarter of next year, according to Pagcor president and chief operating officer Jorge Sarmiento.

Retail tycoon Henry Sy’s SM Group, jointly with Belle Corp. and AB Leisure Global Inc., and port magnate Enrique Razon’s Bloomsbury Investments have started work on their gaming havens. Resorts World Manila developer Travellers International Hotel Group Inc. and Japan’s Aruze group are expected to follow suit soon.

These four groups have secured Pagcor licenses to operate hotels with casinos within the Entertainment City.

Sarmiento said that according to Bloomsbury, which signed a management service agreement for its project last October 17, its hotel and casino should be up and running by October or November 2012. SM Group’s Belle Grande Manila should also be ready to serve guests by around the same time.

Travellers International and Aruze, on the other hand, were supposed to submit to Pagcor this month the implementation plans for their respective projects, he said.

"We really need to set a timetable for this as other countries may get ahead of us. But the fact that the first two licensees have already started work on their projects should put pressure on the other two to start working as well," he said in a telephone interview.

Benefits of gaming

He said Japan and Vietnam were also looking at getting a piece of the US$115-billion global gaming pie, of which the Philippines wanted to get at least 10 per cent.

The country is not aiming to become another Macau, according to Sarmiento, but is just seeking to use gaming as a vehicle to boost tourism and generate new jobs and additional government revenues.

"The pie for gaming is still very big. The direction is really Asia because of Asians’ large disposable income and cultural attachment to gaming. We’re confident that this is the way to go. It will help promote tourism, provide thousands of direct and indirect employments, generate revenues for the government and perk up the economy," he pointed out.

According to Pagcor’s estimates, the Entertainment City can attract a million additional new tourists a year, generate 40,000 direct and 150,000 indirect jobs, and at least US$1.5 billion in annual income for Casino Filipino.

But Philippine Travel Agencies Association president Aileen Clemente said the country should just look at gaming as one of the niches that it should target and not one of its major tourism come-ons.

"That’s one of the niches [we can play in], but we’re not selling it in our packages. We can leverage this, but not as a primary [attraction]. We can sell this as a niche, and not as part of our mainstream promotion," she said. "We should focus more on culture and the arts. We have a lot of beautiful churches. We’re the only Catholic country in the region. We should capitalise on that."

Philippine Chamber of Commerce and Industry tourism committee chairman Samie Lim, on the other hand, agreed that the country should capitalise on the potential of the gaming industry, but also noted that safeguards should be put in place to ensure that locals would not be the ones who would get reeled in by the casino operators.

He said the Entertainment City development should not have been placed on the bayside as this was too close to the locals. Casinos should also not be placed on just any hotel.

Safeguards, value-added

Sarmiento said Pagcor also took this into consideration. Since the development is, indeed, very accessible to locals, he said safeguards would be put in place to ensure that the casinos would cater mostly to tourists.

Pagcor could follow the Singapore model, which had locals pay to be allowed entry into the Marina Bay Sands casino, or some other yet-to-be-crafted model, he said.

Casinos would also not be placed in just every other hotel in the country, he said, as there are stringent requirements in terms of number of corresponding hotel rooms that potential casino operators will have to comply with.

For the Entertainment City, each of the four licensees is required to put up at least 800 hotel rooms and 250,000 square meters of leisure space, only 7.5 per cent of which is devoted to gaming.

With the right policies in place, Lim said the gaming industry has a huge potential to really jack up tourism and generate significant revenues for the country.

"The Philippines can still do it. The country’s value-added is entertainment. That’s the bright side. We can provide employment to our entertainers and they will no longer have to leave the country," he said. "Pagcor’s Entertainment City is a good idea."

Abigail L. Ho

Philippine Daily Inquirer

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