IAG 2006-01 Jan - page 8-9

Letters
AWhineAbout theGrapevine
TheundersignedChief Legal Counsel of thePhilippineAmusement andGamingCorporation (PAGCOR)writes in response to thearticlepublished in theOctober 2005
issueof yourmagazineentitled,“From theManilaGrapevine.”
Wewish tocorrect certainpiecesof inaccurateandmisleading information that youallegedlygathered from the“grapevine.”PAGCOR’sprofitabilityhasneitherdeclined,
norhas itbeen tarnishedbycheap rumoursof corruptionand investormistrust.
Under itspresent leadership,PAGCORhasflourished intooneof themostprofitablecorporations in thePhilippines today.PAGCORChairmanandCEOEfraimC.Genuino’s
visionaryapproach,coupledwithhisbusiness savvyandno-nonsensemanagementhaspropelled thegamingfirm to the secondhighestposition in termsof revenues in
Asia,nextonly toMacau.
In2001,PAGCORpostedoverPhp17.46billion total income,exceedingbyalmost 20% itsPhp14.6billion incomeof 2000. In2002, thecorporationpostedPhp20.21billion,
whichearned it thedistinctionas themostprofitablecorporation in thePhilippines for 2002,according to thePhilippineSecuritiesandExchangeCommission (S.E.C.).
In2003,whilemost countrieswithcasinogaming industries suffered immensely from theeffectsof theSARS scare,PAGCORkept its shortfall toaminimum,earning
Php19.43billion for that year. In2004,PAGCORbeat all previous income recordsbypostinga record-breakingPhp21.90billion, thehighest ever in itshistory.
If the issuesof corruptionand inefficiencybear any traceof trust in them,howdoesoneaccount for itsoptimal andunprecedentedperformance?Tomismanageand to
register top-notch featsare two ironicand incongruentpropositions.Onecanonlymake senseof thesedeviant claims in thecontextof fiercecompetition in the region.
PAGCORhasundoubtedlyearned theenvyof itsneighbours.What youhave featured inyourmagazine reeksof contrivedpress releases fromPAGCOR’s competitors.
If these“PR lies”proveanythingat all, it is the fact that thePhilippinecompetitorsaredesperate,and theyarenow resulting toblackpropaganda.What theyclaim tobe
“from theManilagrapevine”isnomore thanmere“sour-graping”.PAGCORhas, indeed,developedaplan thatonce realised,will transform thePhilippinesas thenext
tourismandgaminghotbed inAsia.And this iswhat is sendingpanic ripplesall throughout the region. It isa fact that thePhilippinegamingexperienceboastsof an
incomparable showcaseof extraordinarypleasures, from the scenic landscapes, togastronomic feats, to thegrandhospitality that isdistinctlyFilipino.Theseare the real
“sweetgrapes”that await thehandsofgamingenthusiasts.Thosewhocannot evencomeclose to the real thing, just content themselves to suckingon thegrapevine.Who
canblame them?
Wewish,however, to remindyou tobemorecircumspect indevotingprecious space inyourpublication tomanipulativeexcretions from thosewhosemotivesare suspect.
Their lies tread the thin linebetween the libellousand theabsurd.
CarlosR.BautistaJr.
Chief Legal Counsel
PAGCOR
Ed:
We thankyou for your feedback.We relyon readersbetterpositioned thanourselves in the industry topointout inaccuracies inour articlesandflaws inour analyses.
However, thearticle inquestionmadenomentionofprofitabilitydecliningdue to“rumoursof corruptionand investormistrust.”Thearticle’s focuswason the investor
mistrust itself,which is likely supportedby such reportsasappeared in theMarch12,2005editionof theManilaTimes (a“contrivedpress release”fromoneof PAGCOR’s
competitors?),stating thatPAGCORChairmanEfrainC.Genuino is facingallegationsofplunder andgraft fromanti-corruptiongroups.Mr.Genuino’s relationshipwith
PresidentArroyo’shusband,Mike, iswell documented,asareallegations thathemayhave influenced theElectoral Commissioneronbehalf of thePresident.
ThePhilippinesalso lacks two things that are fundamental underpinningsof foreign investment:a stableGovernment and relative freedom fromcorruption.On the latter
point, the2004Transparency International CorruptionPerceptions Index ranks thePhilippinesadismal 102,down from93 in2003. In short, thecountrydoesnotpresent
muchof anattraction forgaming industry investorswithaplethoraof options,most recently inMacau,Singaporeand theUK.
If youcheckyourfigures, rather than suffering“immensely from theeffectsof theSARS scare,”Macau’sgambling revenuesactually roseover 30%year-on-year in2003,
while those in thePhilippinesdeclined.Youareatpains to stress theprofitabilityof acompany that enjoysamonopolyposition.Monopoliesareperhapsbetteroff not
trumpeting theprofits theyderive in theabsenceof competition.Basiceconomic textbookspointout thatmonopoliesdo indeed simultaneouslymismanageand“register
top-notch feats.”That is thenatureofmonopolies.
Asafinal point,noneof theMacaucasinooperatorswe spoke tohavementioned feeling the“panic ripples”youallegePAGCOR’sgrandplanshave sent through the region.
TheFutureofMachines inMacau
Youcannot comparewinper tablewithwinpermachineasabasis for arguing there isno future formachines inMacau.A typical casino table,sayBaccarat,hasa footprint
roughlyequal to thatof 10machines,whenyou takeaccountofgaming seats.ApremiumofMOP1,000permachinep.a. ispayable,comparedwithMOP300,000p.a. for a
VIP table .Tables requiredealers;machinesdon’t. If tablewin,especiallyonmassmarket tables,declines, therewill comeapoint atwhich theeconomics favour a switch to
machines.Thereareno“dead”machines,as theremaybedead (i.e.non-operational) tables in someproperties inMacauas the industrymatures.
DavidGreen
HeadofGamingPractice
PricewaterhouseCoopers (Macau)
Ed:
A furtherpoint is thedifferent staffing requirementsof tablesandmachines,especiallygivenMacau’sworsening labour crunch.Amere50 staff areneeded tooperate
300machines24hoursaday.Over 2,000 staffwouldbeneeded tooperate300 tables.
Pleaseemailall lettersandcomments to theeditor tokareem@asgam.com.Lettersmaybeedited for lengthandclarity.
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