GGRAsia – Auditor slams Pagcor for flutter on condos, slot parlour

Auditor slams Pagcor for flutter on condos, slot parlour

Jan 13, 2015 Newsdesk Latest News, Philippines, Top of the deck

Philippine state auditors have criticised casino regulator-cum-operator Philippine Amusement and Gaming Corp (Pagcor) for investing in non-core assets and for launching a new slot parlour in Laoag, in the province of Ilocos Norte, that later struggled.

In 2008, Pagcor paid PHP264.6 million (US$5.9 million) to buy 66 condominium units in Parañaque City from AMVEL Land Development Corp. Five years later, 54 units remained unsold, leaving the gaming regulator with PHP218.1 million of unrealised profit, the country’s Commission on Audit said in its report on Pagcor for the year ended December 31, 2013.

The units were meant to be sold as “decent and affordable housing facilities” to Pagcor officials, but only 12 units have been sold to employees.

“The idle funds could have been used for activities more beneficial in the attainment of Pagcor’s objectives/goals,” pointed out the report. “Apparently, there was inadequate planning prior to the purchase of the units,” it added.

Auditors also found that Pagcor incurred unnecessary expense – amounting to PHP2.5 million and representing transfer tax and registration fees for the 66 condos – that should have been paid by the developer.

The report says Pagcor had sought to reassure the audit team that efforts to sell the condominium units to employees were being pursued, but Pagcor had stated only “a few [staff] qualify in terms of capacity to pay the amortisations”. The gaming regulator said it would be consulting its own legal department regarding the transfer tax and registration fees.

The Commission on Audit also criticised Pagcor for a struggling slot machine venture in the city of Laoag, which led to losses worth about PHP13 million in 2013.

“The projected winnings of PHP2.88 million per month or PHP34.56 million per year of Plaza Del Norte Slot Machine Arcade in Laoag City was not achieved,” said the audit body.

The slot parlour started operations on January 2, 2013 and had 80 slot machines as of December 31 that year. “Plaza Del Norte Slot Machine Arcade had been incurring continuous losses since it started operations,” said the report published on Friday.

The auditors recommended that Pagcor shut down the Plaza Del Norte slot parlour, unless the corporation were able to turn around the fortunes of the venue.

Pagcor said in the report it was taking steps to transfer the whole slot operation from its current location in a convention centre to the neighbouring Plaza Del Norte Hotel “to better improve its accessibility to clients”.

The audit body also said in its report that income accruing to Pagcor from junket gaming operations at several luxury hotels in the Philippines – referred to only as the Midas, Sofitel and Pan Pacific Hotels – and involving PHP50.7 million, had been “erroneously recorded as rental income”, resulting in the money “not being subjected to mandated contributions” as required by law.

The report disclosed other deficiencies in Pagcor’s financial controls, including discrepancies in the accounts of some units and projects, and 124 “unserviceable vehicles”, with only 39 of them earmarked for disposal.

Pagcor’s net profit for 2013 amounted to PHP3.09 billion, an increase of 2.3 percent from a year earlier, according to official data.