Aug 26, 2016 Newsdesk Latest News, Philippines, Top of the deck
Brokerage CLSA Ltd estimates casino resorts in the Philippines capital Manila recorded overall gross gaming revenue (GGR) of PHP7.2 billion (US$155 million) in July, up by 25 percent in year-on-year terms. July was the sector’s third best ever month, said analyst Marcus Liu, in a Thursday note.
Manila’s casino resort sector includes three properties, namely: City of Dreams Manila, run by a subsidiary of Melco Crown Entertainment Ltd; Resorts World Manila, owned and operated by Travellers International Hotel Group Inc, a venture between Philippine-based Alliance Global Group Inc and Genting Hong Kong Ltd; and Solaire Resort and Casino, controlled by Bloomberry Resorts Corp.
GGR for the sector in the first seven months of 2016 was up 23 percent from the prior-year period, Mr Liu added.
“City of Dreams Manila’s July GGR virtually equalled its all-time high set in May. The high-end business was its strongest ever and mass also rebounded well,” the CLSA analyst stated. The property recorded monthly GGR of PHP2.1 billion for the period, a jump of 42 percent compared to the year-earlier period, according to CLSA’s estimates.
The brokerage added that Solaire achieved an estimated GGR of PHP3 billion in July, up by 18 percent in year-on-year terms. GGR at Resorts World Manila increased 20 percent year-on-year in July to PHP2.1 billion.
Official data previously released by the country’s gaming regulator – the Philippine Amusement and Gaming Corp (Pagcor) – showed nationwide casino GGR for the first half of 2016 was PHP65.56 billion, up by 24 percent in year-on-year terms. The two casinos located in Manila’s Entertainment City – City of Dreams Manila and Solaire – generate total GGR of PHP40.69 billion for the period, an increase of 22 percent, according to Pagcor’s data.
Recent negativity ‘overdone’
Mr Liu noted in his Thursday note that “the gaming sector in the Philippines has been dogged by negative issues over recent months that have taken the shine off strong fundamentals”. That was a reference to comments made by Philippine President Rodrigo Duterte, stating that he planned to stop the proliferation of domestic online gambling and revoke existing licences.
Casino regulator Pagcor had revoked a total of 124 operating licences for e-Games parlours since the beginning of July, the Philippine Daily Inquirer newspaper reported in early August.
Andrea Domingo, the new head of Pagcor, said on August 8 that the regulator would not renew the operating licence of PhilWeb Corp, a major operator of such parlours. Mr Duterte had singled out PhilWeb’s controlling shareholder, Roberto Ongpin, as an example of one of the country’s “oligarchs”, and indicated his hostility to that class of people.
Pagcor’s Ms Domingo had additionally said her organisation planned not to renew the licences of a total of 302 e-Games venues and 324 e-Bingo outlets that cater to local bettors.
“While there will be overhangs from these issues for some time, we think that much of this has been overdone,” Mr Liu wrote in his note. “[The] clampdown on e-gaming doesn’t mean the same thing will happen to the integrated resorts,” the analyst stated.
He added: “President Duterte’s actions stem from his concern for the lower-income Filipinos and the social impact that that carries. We do not think that this will have an impact on the integrated resorts, which target the foreign market and generally price out the lower-income Filipinos.”
Instead, Mr Liu noted there were “a number of potential catalysts on the horizon” for casino resorts in the Philippines, including a new expressway – to partially open next month – providing improved access to Entertainment City for visitors arriving to Manila’s international airport.
“While [President] Duterte’s stance towards gaming hasn’t proven to be massively positive thus far, his attempts to clean up Manila’s image as an unsafe city, we feel, will be positive for inbound tourism, which has already seen strong growth year-to-date,” the CLSA analyst stated.
“Moreover, his softer stance towards China should set up stronger arrival trends from a country that has lagged in recent years,” Mr Liu added.
Chinese high rollers are – according to several investment analysts – the main driver of VIP gambling across the Asia-Pacific region. CLSA’s estimates showed that VIP play accounted for around 40 percent of total GGR in Manila’s casino resort sector in July, coming in at PHP2.8 billion, up 55 percent from the previous year.
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