GGRAsia – Pagcor casino sell-off 2025, start price US$1.1bln: Tengco

Pagcor casino sell-off 2025, start price US$1.1bln: Tengco

Aug 15, 2023 Newsdesk Latest News, Philippines, Top of the deck

The expected starting point for cash to be raised from privatisation of a chain of Philippine state-owned casinos is PHP60 billion (US$1.06 billion), a figure 25 percent lower than was mentioned in March when Alejandro Tengco (pictured in a file photo), head of the country’s casino regulator, had announced some details of such a sell-off plan.

The PHP80 billion that Mr Tengco, chairman of the Philippine Amusement and Gaming Corp (Pagcor), had referred to in his March comments, remains the upper estimate from the sale of its Casino Filipino-branded chain of public-sector casinos.

The price range was mentioned by the official on Monday, in the country’s House of Representatives. It was during the House Committee on Appropriations’ hearing on Pagcor’s budget for 2024. Mr Tengco also mentioned mid-2025 as a starting point for the process, according to local media reports.

“The privatisation of the 45 properties of Pagcor will push through in the third quarter, at the earliest, of 2025,” he was cited as saying.

He added that President Ferdinand Marcos Jr had approved the privatisation plan. Mr Tengco has cited one motivation as being a wish to end Pagcor’s controversial dual role as an operator and regulator.

“Pagcor should purely be a regulator,” Mr Tengco said. “We are the only one in the world that acts as a regulator and operator.”

“It is inappropriate and unethical because we give licences and yet we also operate,” he added.

The Pagcor chairman described the sell-off price range as reflecting a “minimum estimate”.

He stated – as quoted by local media – “we expect [the amount] to rise,” because the privatisation would be subject to competitive “bidding”.

The chain includes more than 40 branches and so-called ‘satellite-casinos’, operating in leased venues from third parties.

The country’s Department of Finance had previously suggested Pagcor’s selling price for Casino Filipino venues could be within the PHP200 billion to PHP250 billion range, but Mr Tengco told the House committee hearing that estimate had factored in some real estate valuations that had initially been attributed to Pagcor.

House Representative Joey Salceda was reported on Monday as suggesting such privatisation could generate proceeds as high as PHP120 billion to PHP128 billion.

A number of investment analysts has suggested even the PHP80-billion figure might be ambitious.

Nonetheless, there have been expressions within the country’s privately-owned casino sector of a willingness to engage with the process.

It is not clear whether any of the figures mentioned would be net of some investment Mr Tengco mentioned in a July speech in Macau, should be put into new equipment at Casino Filipino venues, prior to a sell-off.

“We are already doing some study on privatisation,” he said on Monday. “The goal is to increase the value of what we will privatise.”

Aggregate gross gaming revenue (GGR) for Pagcor-operated sites reached PHP15.79 billion last year, with more than half from mass-market slot machines, at nearly PHP8.47 billion.

Representative Rufus Rodriguez was reported on Monday as saying he would file a resolution to oppose the Casino Filipino-chain privatisation plan. This was on the basis that the chain’s earnings were likely to increase amid an upturn in the country’s casino sector.

“It seems that everything will be in order in the coming years, so why are we going to sell the goose that lays the golden egg?”, Mr Rodriguez was quoted as saying.