GGRAsia – Pagcor predicts growth despite China’s anti-corruption drive

Pagcor predicts growth despite China’s anti-corruption drive

Feb 16, 2015 Newsdesk Latest News, Philippines, Top of the deck

The Philippines gaming industry could see “another double-digit growth” this year, as the number of VIP players brought in by junket operators increases rapidly, said the head of state-run Philippine Amusement and Gaming Corp (Pagcor).

In 2014, the local casino industry saw a 16-percent increase in gross gaming revenue (GGR) compared to the previous year, Cristino Naguiat, chairman of Pagcor, told the Philippine Daily Inquirer newspaper.

Mr Naguiat said that “another double-digit growth [in GGR] is very possible” this year, aided significantly by the opening of the City of Dreams Manila casino resort, developed and operated by Melco Crown (Philippines) Resorts Corp, a subsidiary of Hong Kong-listed Melco Crown Entertainment Ltd.

“At US$2.5 billion for 2014, we’re still lower than Singapore’s. But ours [gaming revenue] is increasing while the rest are declining,” Mr Naguiat was quoted saying. “We’re coming from a low base figure.”

“But more important than that is the fact that our VIP and junket players have increased by almost 50 percent,” Mr Naguiat added.

The Philippines gaming market grew to about US$2.2 billion last year, with “circa 70 percent of which local,” according to estimates by UBS Securities Asia Ltd.

In a note about the opening of the City of Dreams Manila on February 2, UBS analysts Anthony Wong and Robin Farley said the new casino resort linked to Melco Crown’s marketing would help “bring regional demand into Manila, against increasing competition from other jurisdictions, e.g. in [South] Korea and Vietnam”.

“We forecast Philippines gaming revenue to grow above US$4 billion by 2017, driven by a healthy domestic consumption backdrop, and some foreign demand,” they said.

Mr Naguiat’s upbeat forecast comes amid a widening anti-corruption crackdown by the Chinese government that has, according to analysts, led to a decline in gaming revenues across the region. Chinese authorities announced earlier this month they would strengthen enforcement actions against casino operators from neighbouring countries that have set up offices in mainland China to recruit Chinese citizens to gamble abroad.

But Pagcor’s chairman said the local casino industry does not rely on Chinese gamblers. “China is not our number one market,” Mr Naguiat said in the interview with the Philippine Daily Inquirer.

“Of course, more Chinese coming here would be better for us, but of 100 million outbound Chinese tourists, we get less than 1 percent of that. It’s relatively small,” he reportedly said. “There’s a wider mix of nationalities coming here to play in our casinos. It’s not just the Chinese.”