MANILA, Philippines - London-based Fitch Ratings said it expects the Philippine gaming sector to improve its market share in the next few years, driven by the opening of new integrated resorts catering to both local gamers and foreign guests.
Gross gaming revenue will surge to $3.3 billion by 2020 from the current $1.45 billion, allowing the Philippines to contribute to the regional growth in Asia-Pacific, the credit rater said in a report.
“The Philippines is likely to improve its market share to about 4.5 to five percent in the next three to five years from the current estimated 3.3 percent,†Fitch Ratings said.
“This will be driven by the absence of a regulatory clampdown on gaming by its citizens, growing tourist arrivals... and the rising number of integrated resorts in the country,†it added.
Much like the next phase of development on Cotai Strip in Macau, the Philippines’ gaming market is on a continuous ramp-up.
In the Philippine Amusement and Gaming Corp. (Pagcor) Entertainment City, Macau casino giant Melco Crown Entertainment Ltd. and SM Group’s Belle Corp. will open the $1.3-billion City of Dreams Manila mid next year.
It will be the second casino complex to open at the 120-hectare Entertainment City, which is groomed to become the Philippines’ version of the Las Vegas strip. In March, port mogul Enrique Razon opened the $1.2-billion Solaire Casino and Resort.
“The Philippines’ attraction as a gaming destination arises from its positioning as a low-cost tourist destination and robust domestic demand, underpinned by growing overseas foreign worker remittances,†Fitch Ratings said.
Gross gaming revenue of the Philippine gaming sector is seen to spike to $3.36 billion by 2020 with a compounded annual growth rate of 11.1 percent, from $1.45 billion as of end-2012, Fitch Ratings said.
Other Entertainment City license holders are Japanese tycoon Kazuo Okada and Resorts World Manila owner Travellers International Hotel Group Inc.
For its part, Pagcor is the country’s gaming regulator and operator. It has 13 Casino Filipino branches, eight private casinos, members-only slot machines, VIP clubs and shopping arcades nationwide.
While the local gaming sector is heavily taxed, its low-cost environment compared with other gaming destinations like Macau, Singapore and Australia counterbalance the high taxes, Fitch Ratings said.
On the macro side, the operating environment in Asia-Pacific will remain more favorable than the US next year, the credit rater said.
“Most operators in the US and Asia-Pacific region are generating solid free cash flow, which will support credit profiles in 2014,†Fitch Ratings said.