Investigate Subic row

It is high time that Malacañang look into the controversy surrounding the closure of the Legenda Casino and Hotel in Subic. Businessmen, investors, and some 1,500 workers whose jobs are tied to the casino, have appealed to Rep. Mitos Magsaysay to bring the matter to the attention of President Arroyo.

The controversy stemmed from the closure by the Philippine Amusement and Gaming Corp. (Pagcor) of the Legenda Casino almost two weeks ago. Pagcor claims that the casino owes the government more than P365 million in gaming license fees.

Legenda countered that it has no financial obligations to Pagcor following a decision handed down by Judge Eliodoro Obiadas of Branch 72 of the Olongapo City Regional Trial Court that said Pagcor had no right to enforce the closure. In fact, it was Pagcor that owes Legenda some P300,000 in lawyers’ fees, as Legenda’s lawyers claimed.

Under Legenda’s original contract with Pagcor (it granted Legend International Resorts Ltd. a provisional authority to operate a casino on March 17, 2003), it was supposed to remit 15 percent of its earnings to the gaming agency. But Legenda had a hard time keeping up with the 15 percent remittance because of financial difficulties.

So Pagcor came up with a novel idea – in lieu of the 15 percent share in earnings, Legenda should instead just pay Pagcor a flat rate of P5 million a month. Legenda rejected the arrangement, quite understandably, and eventually filed a case with the Olongapo City RTC. The court said the new agreement was untenable, and ordered Pagcor not to enforce it and not to take actions that would be detrimental to the operations of the casino hotel.

The case has become messier as each day passes as Pagcor appears bent on keeping the casino closed. The Subic Bay Chamber of Commerce has already expressed concern over the issue and is seeking a speedy resolution of the matter. Pagcor’s actions in the Legenda case have already sowed anxiety among other Subic locators.

Investors are understandably concerned over Pagcor’s actions. Legenda CEO Khoo Boo Boon may have a point when he decried Pagcor’s "mobster-like takeover" of the casino and the gaming firm’s ensuing actions to keep the casino closed. After being reminded of the court order that was still in effect, Pagcor raised a rather peculiar rationale for the closure: Legenda had violated the conditions of its franchise when it staged a sabong derby in its premises in 2004.

Legenda countered, and we are told by many businessmen in Subic, that the derby was just a tourism gimmick to boost the leisure business at the port. Besides, Legenda executives explained that there was nothing in the Pagcor franchise that prohibited the casino hotel from staging the derby. The event also had all the necessary permits so many people in Subic are wondering what the charges are all about.

Something is amiss when an agency like Pagcor swoops down on a property like Legenda and shuts down the place for reasons that appear to have been plucked from someone’s shallow imagination. As a result, Subic businessmen are wondering what the real agenda is behind Legenda’s closure.

Whatever its reasons are, Pagcor should be more circumspect when dealing with its franchisees. Legenda is owned by Malaysia firm Legend Worldwide Holidays Bhd., a wholly owned subsidiary of Metroplex Holdings Sdn. Bhd. At a time when Malacañang is busy projecting the country as a sound investment area, cases like the Legenda closure send the wrong signals to investors.

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