The operator of the City of Dreams (CoD) Manila casino resort is in talks with junket operators to bring in high rollers to the venue, said officials from Belle Corp, one of the investors in the complex.
City of Dreams Manila (pictured), which is managed by Melco Crown (Philippines) Resorts Corp, is a partnership between casino operator Melco Crown Entertainment Ltd and Premium Leisure Corp, a unit of Belle, controlled by the family of Philippine billionaire Henry Sy.
On the sidelines of Belle’s stockholders’ meeting on Monday, vice-chairman Willy Ocier told reporters that the City of Dreams Manila is boosting its VIP market, targeting to go “full blast” after May, reported Philippine newspaper BusinessWorld.
Mr Ocier confirmed to reporters that Suncity Group Ltd, the largest junket in Macau judged by share of VIP chip roll, would soon have operations at City of Dreams Manila.
Morgan Stanley Research Asia Pacific said in a report in March that Suncity would be “adding four VIP rooms” around mid-2015 in City of Dreams Manila and in Solaire Resort and Casino, the latter operated by Bloomberry Resorts Corp, another Philippine gaming licensee.
Activity at City of Dreams Manila, which held its grand opening in February, has been in line with expectations, Belle chief financial officer Manuel Gana said, without providing details.
“Mass market has been fairly healthy. We didn’t have VIPs yet in the first quarter,” Mr Gana said, according to BusinessWorld. “Since we opened, it’s a process of Melco [sic] signing up junket operators so that’s really what has been happening,” he reportedly said, adding that the company expects to see “significant growth in the near future”.
Expanding at home
Weakness in Asia’s largest casino market is providing new opportunities in secondary Asian jurisdictions, several Hong Kong-based investment analysts have said recently.
Macau gross gaming revenue (GGR) fell 36.6 percent year-on-year in the first three months of 2015, with VIP baccarat GGR down 42.1 percent in the quarter to MOP37.67 billion (US$4.72 billion).
This has been attributed by analysts to changes in behaviour by Chinese high rollers. Mainland China currently has a campaign against official corruption that is said to have inhibited many Chinese high rollers from playing in Macau. As a result, VIPs are making their bets elsewhere and emerging gaming markets like the Philippines and South Korea are vying to get a share of those high rollers.
According to Morgan Stanley’s March report, proxy betting – gambling done by telephone by players not physically present in the casino – is growing rapidly in casinos in Manila, supported by the local gaming regulator, the Philippine Amusement and Gaming Corp (Pagcor).
While some Philippine gaming operators are seeking expansion in other Asian jurisdictions – Bloomberry said it plans to invest more than US$1 billion in a casino resort complex in South Korea – Belle might pursue expansion opportunities in the domestic market if Pagcor decides to give out new gaming licences in the future.
“If we were to expand beyond City of Dreams Manila, our first priority will be Metro Manila and then other parts of the Philippines,” Mr Gana was quoted saying.
“I think the market here is pretty fertile and very promising. Given where we are now, we don’t have to look abroad just to expand this business,” he added.
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”As the Macau gaming revenue structure is now leaning heavily towards the mass business … once the border fully reopens, the recovery from mass should drive the sector to bounce more swiftly”
Vitaly Umansky, Louis Li and Shirley Yang
Analysts at Sanford C. Bernstein