Inside Asian Gaming

INSIDE ASIAN GAMING | April 2008 Thriller in Manila The Philippines plans a knockout casino city Cover Story I s Steve Wynn about to apply for Philippine citizenship? That was a question on people’s minds as Pagcor—the Philippine Amusement and Gaming Corporation—named potential partners for its planned US$15 billion gaming and entertainment hub known officially as Bagong Nayong Pilipino – Manila Bay Integrated City . Participants for the project on reclaimed land at the outskirts of the national capital include ARUZE Gaming (in a possible joint venture withWynn Resorts) and Malaysia’s Genting Group. The announcement wasmade during a conference at Asia’s Gaming & Entertainment plus Leisure EXPO (known as Asia’s GEM) in Manila. The proverbial elephant in the ballroom at the Hyatt Hotel and Casino Manila when the statement came was the Philippines’ famous 60:40 law. This prevents foreign citizens fromhavingmajority equity stakes inmost Philippine ventures, including real estate developments. Foreign versus domestic Why, many delegates were asking themselves and each other, would companies such as Wynn, ARUZE and Genting be happy to front up at least one billion US dollars in capital (independently or with partners)—with a minimum 50% equity as required under the project’s terms of reference—only to see their contribution watered down to a 40% equity stake in the final operating entity? The answers are they wouldn’t and they probably won’t have to. There may be ways round 60:40. The Philippines in general and Pagcor in particular are experiencing a shortage of capital for domestic investment. For political reasons, the country has an emotional attachment to the idea of keeping