Gaming as a gateway

Let’s take Fitch Rating’s recent report on the murky prospects of the gaming industry in the Philippines as friendly advice.

Last month, the international risk research company reported that the country’s gaming industry, now experiencing double digit growths, will likely encounter difficulties which would hamper its prospects beyond 2015.

This is indeed bad news for casino projects like Travellers International Hotel Group, City of Dreams, and Tiger Resorts that are slated to open soon in the Entertainment City currently owned and operated by the Philippine Amusement and Gaming Corp. (Pagcor).

With so much money already on the ground, including the newly opened Solaire Resorts Manila of port tycoon Enrique Razon Jr., this is now a battle first and foremost not among the businesses that have invested in the Entertainment City, but the Philippines against other gaming centers in the region.

Resurgent Macau

In particular, our concerted effort must focus on competing against a resurgent Macau that has been doubling efforts to reestablish itself as the gaming capital of Asia, or even surpassing that of Las Vegas’ position to claim the title of world’s best.

When Pagcor undertook the task to vie for a bigger chunk of the lucrative gaming sector in the early 2000s, it had in mind the turmoil that Macau was undergoing after having been returned to the anti-gambling communist Chinese government.

Having been the undisputed center of gaming in Asia since the 1960s that attracted even Westerners, Macau had been a tightly run ship under its Portuguese colonial masters with Stanley Ho controlling gambling in the state under his Sociedade de Truismo e Diversoes de Macau (STDM).

The turnover of Macau to China meant that Stanley Ho could not expect to be given the same revered treatment he received for 40 years. However, the indecision of the Chinese government in the early years of its Macau governance did not also mean that gaming would continue in this former colony.

Luring the many intransigent Asian gamblers who had made Stanley Ho and Macau a major tourist destination and major revenue earner was a wonderful opportunity for countries like the Philippines and Malaysia whose laws were less stringent than wannabe competitors like Korea, Indonesia, Cambodia and Thailand.

Moral concerns

In the latter countries’ case, widespread negative public sentiment on gambling inhibited any laws that would establish a gaming center to compete against Macau and re-channel any of the substantial revenues from displaced gamblers.

Despite the strong moral and religious concerns in most Asian countries, there is continued widespread appetite for gambling fueled partially by an inherent wagering nature. This makes Asia as a region with potential for one or more gambling centers.

While it took a few years for the Philippine government to pass a law that would establish Pagcor’s Entertainment City as a staunch rival of Macau, there were some major concerns that were more a headache than the moral and religious sentiment of a predominantly Catholic country.

Political sensitivities

The latest problems have to do with recent political and security issues, both needing some brilliant diplomatic maneuvers by our national leadership.

Many Chinese, both coming from the mainland and Hong Kong, are rabid gambling habitués and still account as a major source of revenues in the gaming industry, more so these days with increased personal wealth and leisure time.

During the days after the Macau turnover, Chinese citizens who would surreptitiously slip into the Macau gambling casinos were persecuted when caught by the Chinese communist government. This left them with no choice but to go on gaming holidays outside of the region.

However, with the change of heart by the Chinese government after recognizing the possible collapse of the Macau economy should Chinese citizens be hounded for going to casinos, a new plan to revitalize the island’s gaming industry was approved.

At the same time, ongoing border disputes are inhibiting the Chinese nationals from entering the Philippines, even if there are other attractions other than gaming for other members of their families. It is therefore imperative for our government to sort out the recent border disputes.

Cohesive tourism plan

In the meantime, more work is needed to shore up the Philippines as a worthwhile gaming destination. For starters, the Philippines’ major port of entry for potential VIP gaming tourists continues to be unsuitable to meet the demands of a future deluge of visitors.

More importantly, to be able to compete well against a renascent Macau, infrastructure that would give tourists access to other destinations such as beaches, golf courses, and even medical facilities are still not in place. For that matter, no one in government seems to be giving this any proper attention.

Turning challenges into a jackpot

Let’s face it. The Philippines has other far superior attractions aside from gaming that could contribute much significantly to bringing in tourism revenues. The Entertainment City should be seen as an important gateway for inbound tourists to sample one or more of the many pleasures that our archipelago can offer.

And the Chinese tourists are not the only market that can pass through this gateway. Like Nevada in Los Angeles, visitors come not just to sit before slot machines or at a gaming table. As has been experienced, the night shows of this American tourism destination has substantially supplemented revenues from gaming.

What’s really left now is to size up the challenges facing our fledgling gaming industry, and to find solutions that will turn these potential setbacks into a jackpot.

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