Inside Asian Gaming

INSIDE ASIAN GAMING | September 2013 44 The Asian Gaming 50 – 2013 with politicians and government officials that bore fruit with VIP rooms in casinos in Pasay City and Cebu and an interest in the Fort Ilocondia Resort and Hotel on the South China Sea in northern Luzon. But it’s the Fontana complex, located in the Clark Special Economic Zone about 80 kilometers from the capital, that has grown to become Jimei’s flagship—a collection of family-style holiday villas and time shares, a hotel, a water park, golf courses, fitness facilities, a sauna and spa, restaurants, meeting and convention space and a boutique casino—a leisure city within a city, catering both to locals and to a Chinese and Korean clientele that Jimei has come to know intimately over the years. Fontana marked its ninth anniversary in April. Mr Lam was born in Guangzhou and moved to Hong Kong at the age of 18. He started out as a bookkeeper at an uncle’s factory, earning a mere HK$1,000 (US$128) a month. He got his introduction to gaming through his uncle, who gambled regularly in Macau. While accompanying his uncle on several trips to the city’s casinos, he built up a network of contacts and started working as a junket sub-agent, a position that gave him insight into the nuts and bolts of building and maintaining customer relationships. By the early ’80s, he was working as a small-time junket representative in Macau. Through diligence and a solid understanding of his clientele, he gradually emerged as a leader in the industry. Regulating a growing national gambling industry is not an easy job under the best of conditions, and in the Philippines, where such conditions rarely prevail, it can be filled with pitfalls. Cristino Naguiat has been negotiating them for three years and making a pretty good show of it too. He’s maintained the stable operation of the government’s third-largest source of revenue, and with the opening earlier this year of Entertainment City’s first integrated resort he can take credit for having shepherded one of its pivotal economic development schemes from vision to reality, a vision he kept alive when all might have been lost amid the corruption scandals that attended the fall of his predecessor. As a regulator he’s charged with overseeing compliance in a national market that’s doubled in size since he took office—driven mostly by Resorts World Manila, which opened in 2009 as the country’s fourth privately owned casino and its largest by far—and it’s going to get a lot bigger now that Solaire Resort & Casino is up and running and Entertainment City’s second licensee, the US$1.3 billion Belle Grande Manila Bay, has set a mid-2014 opening date. Mr Naguiat forecasts the market will generate $2.5 billion in total revenues this year, reaching $10 billion by 2017, when all four Entertainment City IRs are expected to be up and running. Good news for the country’s stubbornly high unemployment rate and for the thousands of Philippine nationals working abroad. But it means pressure will be mounting on PAGCOR to get out of operations and concentrate on regulation. President Benigno Aquino’s supporters in Congress have been pushing such a bill for more than a year. And it’s not making it any easier for Mr Naguiat to keep the corporation’s Casino Filipino brand competitive in one of the few countries in the world where private- and public-sector 32 Cristino Naguiat Chairman and CEO Philippine Amusement and Gaming Corporation The Grand – Ho Tram Strip has overcome its share of challenges to get the doors open—not least among them the abrupt exit earlier 33 Michael Santangelo Vice President and Chief Operating Officer Ho Tram Project Co. Ltd gaming jostle daily for players. That effort was slapped with a fresh challenge in April with a court ruling that says all the country’s licensees, including PAGCOR, must pay the 30% corporate income tax on top of their gaming taxes and fees. PAGCOR was hit in addition with a requirement to pay a 5% franchise tax. The corporation missed its profit target for the first half of the year by 5%, in part due to higher contributions to the government. Net income was PHP1.4 billion (US$31.9 million) on total revenues of PHP21.06 billion ($480.2 million), which were down slightly from the same period last year. On the plus side, results from the 7,100 machine games and 650 table games operated by Casino Filipino and some two dozen PAGCOR slot arcades exceeded forecasts, coming in at PHP14.73 billion. Moreover, the corporation managed to reduce expenses in the first half while exceeding its projected contributions to the government by 16%. Those payments amounted to PHP10.64 billion, the bulk of which—50% after deducting the franchise tax—went directly to the Bureau of the Treasury. this year of MGM Resorts International as management partner— and there will be more to come for Vietnam’s first experiment in large-scale destination gaming. With casinos off limits to the country’s citizens, The Grand’s success depends on its ability to market itself to big-spending foreigners and comfortably transport them the 125 or so kilometers from Ho Chi Minh City to what is a fabulously appointed property on