At the recent Asian Gaming and Hospitality Congress in Macau the topic of the new casinos in the Philippines was very much to the fore. With the first stages of some properties in the Manila Bay Entertainment City due to open in 2013 it could be the start of a transformative period for casino gaming in both the Philippines and the wider Asian region.

The Philippine gambling market is already well-developed across a number of different sectors. Much of the gambling in the Philippines is run directly by, or in partnership with the Philippine Amusement and Gaming Corporation (PAGCOR), which is currently government-owned. PAGCOR already runs a number of casinos, arcades, and VIP Club across the country under the Casino Filipino name. And whilst these venues offer the usual mix of table games, slot machines, and entertainment, they are nothing compared to the scale of what is being planned at Manila Bay Entertainment City. 

In 2011 PAGCOR generated PHP 24.78 billion (US$ 0.60 billion) from its own gaming operations. This was split almost equally between tables games (PHP 12.54 billion) and slot machines (PHP 12.25 billion). PAGCOR’s gaming operations accounted for 68% of its total revenues of PHP 36.65 billion in 2011. The casinos being planned at Entertainment City could eventually see total gaming revenues of 5 to 7 times that figure once all are fully opened.
There have been four licences issued for casinos in the Manila Bay complex and each licence holder is in the process of completing their multi-billion dollar gaming resort. 
Bloomberry seems set to be the first of the licensees to open the initial stage of its property, with an opening scheduled for March 2013. Bloomberry’s Soliare Manila will include a 500-room resort, 90 VIP gaming tables, 200 mass market gaming tables, and 1,200 slot machines. The chairman of Bloomberry is Enrique Razon Jr., one of the Philippines’ richest men. Razon bought into Bloomberry back in 2010 and clearly has international plans for Solaire. Razon said in 2012 that he wishes to develop Bloomberry’s Solaire gaming brand not just in the Philippines but overseas too: “It depends on what markets open up. I’m talking more about some possibilities in the Philippines but likewise outside the Philippines.” 
Genting, which already has long experience of running casino resorts elsewhere in Asia, is part of the Travellers International Hotel Group that is developing the Resorts World Manila Bayshore. Genting already runs the Resorts World Manila which opened in 2009 and is planning to complete a second phase of the property by 2015. The Resorts World Manila Bayshore is due to open in 2016 and, in addition to the gaming floor, will include such features as: a 3,000-seat opera house, two hotels (with 3,500 rooms when fully opened), shopping malls, a possibly even a theme park. Once all phases are complete the Bayshore could be three times as large as the Resorts World Manila.
 
But nothing is straightforward in gaming and the political backdrop against which these resorts are being built is complicated. 
The future of PAGCOR and the country’s gambling industry was placed under review by the newly elected President Benigno Aquino, who began his six-year term in June 2010.
President Aquino’s election campaign was run on the slogan “when no-one’s corrupt, no-one will be poor”. He ordered an investigation into the entire nine-year gambling policy of PAGCOR under the previous chairman Efraim Genuino as well as a review of licences. The aim of the investigation is to determine whether the state has received all the revenues it was due from PAGCOR’s activities. A new chairman of PAGCOR has been appointed in Cristino Naguiat
The President has also said he does not encourage gambling and is opposed to casinos in non-tourist zones. The review of licences is thought to include the existing Resorts World Manila as well as the wider Manila Bay Entertainment City project. 
The new president’s stance on gambling could see the project have a greater emphasis on being a tourist destination rather than specifically a gambling destination.
This emphasis on a “tourist destination” seemed to be confirmed in September 2011 when PAGCOR chairman Naguiat explained, “PAGCOR is committed to creating a multifaceted leisure and entertainment centre that is internationally benchmarked. This way, the Philippines can compete with the best in the world and attract the lion’s share of tourists”. A few months later in December 2011 PAGCOR said it would be appointing an independent consultancy to ensure the Manila Bay licensees adhered to the standards outlined by PAGCOR.
There is also the possibility that the government-owned PAGCOR could be privatised. President Aquino has said that he would consider privatising PAGCOR in an attempt to stop corruption and get the highest amount of revenues for the state. By conducting the review of the business he could be making preparations to get the best price for PAGCOR if it is privatised in the future. 
In August 2010 Ramon Ang, vice chairman of San Miguel Corp was said to have made a US$ 10 billion offer to buy PAGCOR in conjunction with Malaysian partners. This initial bid has spurred offers from other interested parties. Belle Corp’s Willy Ocier is also reported to have expressed an interest, which was repeated in January 2011.
Senator Ralph Recto introduced a bill in 2012 – Senate Bill 3178 “An Act Creating the Philippine Amusement and Gaming Corporation (PAGCOM), authorising the appropriation of funds therefore, and for other purposes” – that would see PAGCOR have its regulatory powers removed and transferred to a new organisation, the Philippines Amusement and Gaming Commission (PAGCOM). PAGCOR’s gambling operations would then be privatised. 
Senator Recto explained: “These distinct [regulatory and operational] functions should not be placed under one agency in order to maintain a separation of power…. There should be a clear separation between the regulator and proprietary activities of PAGCOR… The government has no business running gambling activities.”
Other proposals in Senator Recto’s bill include: a requirement for casinos to focus on foreign tourists, licences only issued to municipalities and cities with more than 100,000 foreign tourists per year, and an entry fee to casinos for local customers.
The casino resorts coming to completion in Manila are clearly on a scale very different to what exists in the Philippines at present. It is only natural, therefore, that there are concerns in some quarters as to the impact they will have. These same concerns have been raised in other jurisdictions which have proposed such large scale gaming projects e.g. Singapore, Taiwan, and the UK.
As the different resorts at Manila Bay open for business over the coming years it is evitable that their performance will be compared to their counterparts in nearby Macau. But there seems to be an appreciation that Manila will offer something different. 
Enrique Razon believes, “the Philippines has more to offer actually than places like Macau and others. There are many things to see here, and we’re coming from a very low base of visitors. [The Philippines] is a tourist destination that has world-class gaming, so there’s something for everyone. That’s really what it has to end up as, not just a gambling [destination], which is what Macau is”. Bradley Stone, President of Global Gaming Asset Management, which will manage the Solaire resort, concurred: “We’re not going to be Macau. But we can definitely compete with Macau”. 

This article was written by GBGC and first appeared in the February 2013 edition of Casino Life magazine.