Analysts from investment banking group Morgan Stanley believe that a proposal for a casino entry fee in the Philippines would – if passed by lawmakers there – have a significant negative impact on mass-market gambling.
A bill was submitted recently by Representative Rodolfo Albano, a member of the Philippine House of Representatives, that sought to impose an entry fee of PHP3000 (US$61) in all casinos and other similar gaming establishments in the country.
Mr Albano said the bill aimed to address gambling addiction among the poorer groups in Philippine society. The perpetrator of June 2′s deadly attack on the Resorts World Manila casino venue in the Philippine capital – in which the police said at least 36 people died – was described by authorities as being a problem gambler, albeit apparently a middle class one.
Morgan Stanley analysts Alex Poon and Praveen Choudhary suggested in an update on Monday that an entry levy, if implemented, could hurt Philippine casino revenue because the entry fee “may deter grind mass and family customers”. “Grind mass” was a reference to the lower end of the mass market.
“Filipino gamblers view gambling more as an entertainment compared to Chinese gamblers in Macau,” the institution’s analysts said, adding they noted Philippine per-capita gross domestic product was 60 percent lower than that of China.
Nevertheless, they remained positive on the long-term development of the Philippine industry.
They pointed out that a similar entry levy bill was proposed in 2014, recommending a casino entry fee of PHP3,500. That bill had made no progress since then.
The analysts also suggested that, even if a levy were introduced, it would have limited impact on the VIP and premium mass segments, given that minimum bets at premium mass and VIP tables were generally PHP3,000 or higher.
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”We expect Goa to quickly become a US$1 billion market as it transitions to land-based casinos (from US$150 million today), which is still just a fraction of India’s total GGR potential of US$10 billion to US$17 billion”
Analyst at Union Gaming Securities Asia