The sell-off of public-sector casinos in the Philippines would lift the perception that the country’s gaming regulator has an “unfair advantage” as dual-role operator-regulator. It would also assist in focusing regulatory work, help stimulate new inward investment, and generate funds for nation-building.
So said Alejandro Tengco (pictured), chairman and chief executive of the Philippine Amusement and Gaming Corp (Pagcor), in a keynote speech at Global Gaming Expo (G2E) Asia in Macau on Thursday.
Due to Pagcor “assuming a dual role of regulator and operator, its operations have been the subject of scrutiny by key decision makers and by major gaming industry players, which see the agency as having an unfair advantage over its licensees,” said Mr Tengco. He was referring latterly to the private-sector gaming venues that are also licensed by Pagcor, which has a network of 43 public-sector casinos under the branding Casino Filipino.
He acknowledged that the idea of ending the dual-role approach had “long been the subject of debate and discussion”.
But he stressed in his Thursday remarks: “The privatisation of our [own] casino operations is now at the forefront of our master plan, with Pagcor shifting its energy towards a purely regulatory role.”
Mr Tengco said the Philippine government “firmly believes that this decision would open doors for an influx of resources contributing to economic development, while eliminating a clear conflict of interest in the dual role” of the regulator.
At a G2E event in Singapore in May, Mr Tengco had told GGRAsia that Pagcor had received “numerous” expressions of interest regarding selling off state-owned Casino Filipino gaming venues.
In March, the chairman had announced the body was looking to raise circa PHP80 billion (US$1.47 billion at current exchange rates) from the sale of its public-sector casinos.
In his Thursday remarks, Mr Tengco observed that for the Philippine gaming market itself, such a sell-off would help with “the infusion of new capital and advanced technologies, which can facilitate expansions, upgrades, and innovations”.
The step would help Pagcor “streamline its processes” and, for the nation as a whole, “create more revenues that will fund more high-impact government projects,” stated the regulator’s chairman.
The Philippine casino sector produced gross gaming revenue (GGR) of PHP59.26 billion in the three months to March 31, up by 80.9 percent from the prior-year period. The tally rose by 5.8 percent sequentially.
Pre sell-off upgrade, POGOs
Before a process for disposal of the Casino Filipino network is launched, there would be work to “upgrade these gaming venues to add value to these properties,” said Mr Tengco.
He added: “In line with this, the following programmes will be implemented. First, the modernisation of Pagcor’s information and communications technology and cybersecurity infrastructure, including its casino management system and the introduction of the new Casino Filipino online.”
He further stated: “Second, we will upgrade more than 3,000 electronic gaming machine units in all our Pagcor-operated [venues].”
A third step was “updating the Pagcor technical standards for electronic gaming machines. These updated technical standards will ensure that these devices deployed in all casino properties within the jurisdiction… are safe, reliable, and, more importantly, fair to all the players,” said the chairman.
Mr Tengco also talked about the plans to require Philippine Offshore Gaming Operators (POGOs) to resubmit applications for licences. The sector has recently been under scrutiny amid allegations that some licensees had been associated with criminal activity.
The chairman said that some current offshore operators and services providers had “used their licences and accreditations as a cover for the conduct of illegal activities, including cryptocurrency, investment scams”.
He stated: “They will all have to reapply under a new framework and structure that we will be releasing soon. We shall undertake the painstaking process to weed out the unscrupulous companies and individuals.”
Rogue elements had hurt “the name of the whole industry and, more importantly, the Philippines,” said Mr Tengco.
The Philippine Inquirer reported on Thursday – citing a 35-page new Offshore Gaming Regulatory Manual for Pagcor the news outlet said it had seen – that offshore operators would in future need an authorised capital stock of at least PHP100 million, of which PHP25 million should be paid up.
Providers of gaming content and other support to POGOs would also be subject to the new capital requirement.
Previously, the minimum capital was PHP15 million, of which PHP3 million had to be paid up, said the outlet.
There would also be a PHP100,000 licence application fee, compared to varying fees previously, said the Philippine Inquirer.
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