Casino operators to seek exemption from smoking, liquor ban

MANILA, Philippines – Casino operators in the country will appeal to president-elect Rodrigo Duterte to exempt their businesses from a planned smoking and liquor ban on all public places nationwide as the gaming industry needs all the help it can get amid an oversupply of casino hotels.

Industry players are set to meet with Duterte this month to discuss the proposed regulation, said Kingson Sian, president and CEO of Travellers International Hotel Group Inc. (TIHGI), operator of Resorts World Manila.

Sian said recently that the casino resorts industry is a legitimate tourism sector that attracts visitors including smokers and drinkers.

“Hopefully the consultations will support what we’re saying but at the end of the day we’re a law abiding association and we will abide by the law,” Sian said.

TIHGI is pouring in P8 billion to P10 billion this year as it develops both gaming and non-gaming components of its business, aiming to strike a balance between the two growth drivers.

Sian said industry-wide gross gaming revenues (GGR) are expected to sustain growth but individual operators may not necessarily post growth given the prevailing oversupply in the market.

“Overall, GGR will grow but individual companies could still be in the red. It will take time. There will be companies who will have a drop even if the industry is growing double digit. This year, we expect industry to grow double-digit, in the teens,” Sian said.

He said it could take five to six years before the market can absorb the oversupply.

“Over time, it will improve as the tourism numbers grow and we’re very optimistic about the pronouncements of the incoming government that they want to fast-track and increase spending in infrastructure, which obviously can help tourism and fight crime. There will be more peace and that will attract more tourists as well,” Sian said.

In the Philippine Amusement and Gaming Corp. (Pagcor)’s 100-hectare Entertainment City, there are two casino operators at present: Bloomberry Resorts Corp. which operates Solaire Resort and Casino and Melco Crown Philippines, which operates City of Dreams.

Tiger Resort Leisure and Entertainment Inc. of casino mogul Kazuo Okada is set to open this year, further tightening competition while TIHGI’s second integrated casino resorts in Bayshore Manila will be completed in phases starting 2019. 

For Enrique Razon, owner of Solaire Resort, improved relations between China and the Philippines would provide a much-needed boost to the industry as it would bring back high rollers from the mainland.

Duterte is set to hold bilateral talks with Beijing over territorial disputes in the South China Sea, which Razon said should be good for business.

About 40 percent of Solaire’s VIP players come from the mainland, Razon said.

“Even if nothing is agreed on during the bilateral talks, it will thaw relations. I think relations will improve dramatically,” Razon said last week.

In the first quarter of the year, three gaming companies – Bloomberry, Melco Crown and Resorts World reported gross gaming revenues of P18.1 billion, reflecting an improvement of 6.4 percent year-on-year, according to COL Financial.

Out of the three companies, only Melco Crown reported an increase in GGR. This was attributed mainly to the continued ramp up of its operations. Nevertheless, Melco Crown’s GGR remains the lowest in the industry.