SBC News Voice of the Sports Betting Industry
Speculation surrounding the future of the Philippine Amusement and Gaming Corp (PAGCOR) has intensified as the government evaluates plans to privatise the state-owned gambling operator and regulatory body.
News sources in Manila report that the government of President Ferdinand “Bongbong” Marcos seeks to ‘reorganise PAGCOR’ by divesting its casino properties “whilst maintaining its regulatory and licensing functions”.
Dealmakers supporting the move have forecasted that a sale of PAGCOR’s 44 state-owned casino franchises could secure 80bn pesos, circa $1.5bn.
The funds are required to launch Bongbong’s election pledge to launch the Philippines Sovereign Wealth Fund, mirroring richer Asian nations.
PAGCOR Chairman and CEO Alejandro Tengco, who assumed his position after Marcos took office in June last year, expressed his support for the privatization of all PAGCOR-operated casinos during the ASEAN Gaming Summit.
In a recent hearing of the House committee on games and amusements, PAGCOR’s treasury revealed that 75% of the agency’s income is derived from its regulatory functions. Privatization would restrict PAGCOR-operated casinos’ income to licence fees, which account for 15% of their current revenue.
The reorganisation of PAGCOR will require the approval of the Governance Commission for Government-Owned and Controlled Corporations (GOCCs) – who are reported to want a guarantee that dealmakers can match their sales target with a foreign or domestic buyer.
Tengco highlighted the unusual position PAGCOR finds itself in, stating: “We are the only regulator in the world that doesn’t only regulate; we also operate casinos. It’s very ironic that that is the case.” He hopes to implement the privatisation during his term, which coincides with Marcos’ presidency until 2028.
Tengco also mentioned that the ‘Casino Filipino’ properties could be bundled when offered to bidders to unlock greater value. However, he pointed out that PAGCOR only leases the properties where these sites are located.
The Philippine gaming industry is currently recovering from the COVID-19 pandemic, with Tengco expressing optimism about annual gross gaming revenue (GGR) returning to pre-pandemic levels by next year “if we are lucky”. The country’s GGR was 256.5 billion pesos in 2019.
Tengco identified Chinese tourists and flourishing new casinos outside Metropolitan Manila as the driving forces behind the industry’s recovery. Four billion-dollar integrated resorts and casinos are already operational in the area.
According to PAGCOR data, the Philippines reported a GGR of 214.3 billion pesos in 2022, up from 113.1 billion pesos in 2021.
In a bid to reassure industry stakeholders, Tengco said: “This is definitely a sign that we are back in business. We are getting there. Ladies and gentlemen, definitely we will get there.”
With the privatization of casino operations, PAGCOR will be able to focus on its core regulatory role, ensuring the continued growth and development of the Philippine gaming industry.
