Inside Asian Gaming

INSIDE ASIAN GAMING | February 2014 16 L ast year was a big one for the Philippines gaming industry. Not necessarily in its overall results, as encouraging as they were, but in the sector’s developmental politics as it becomes what is hoped will be a destination to rival Singapore. Investigations continue into the dealings of Kazuo Okada’s Universal Entertainment, a controversial tax ruling has injected uncertainty into the country’s emerging resort casino industry, and the old year was seen out with a high-profile spat between Bloomberry Resorts Corp., owner of Manila’s new Solaire Resort & Casino, and the property’s former operator, Global Gaming Asset Management. Universal appears to have resolved its difficulties with finding one or more local partners to meet local ownership requirements for its Manila Bay Resorts development, which is slated at some point to join Solaire as one of four large-scale gaming complexes licensed for the government’s new Entertainment City complex in the capital city. After discussions with several groups, Universal finally inked deals with local developers Century Property Group and First Paramount Holdings 888 to join it on the project. Universal’s Philippines subsidiary, Eagle I Landholdings, has been accused of selling stakes to dummy companies in order to circumvent the government’s 40% local ownership requirement. The case was still being investigated, as of this writing. Bribery allegations have also stalked the company but have not resulted in any legal action to date. Further drama was created by the September rift between Bloomberry and GGAM. Reports suggest that the former accused the latter of not doing enough to lure the Chinese VIP segment to Solaire, which opened last March as the first of the Entertainment City resorts. Bloomberry cancelled its 8% equity partner’s operating contract and replaced Solaire COO Michael French with ex-Marina Bay Sands chief Thomas Arasi. GGAMhas taken the case to arbitration in Singapore, where it remains pending. GGAM also attempted to sell its entire stake in Bloomberry, worth about US$165 million at recent prices. Bloomberry requested a temporary injunction against the sale, which was granted late last month. Taxation continued to command a place in the spotlight. Following a 2012 decision affirming the liability of PAGCOR, the government’s casino operator, to pay the country’s 30% corporate tax, the Bureau of Internal Revenue last April said the tax also applies to the rest of the industry. Philippine casinos currently pay a 15% levy on VIP gaming revenue, 25% on mass-market and a 5% “franchise fee”. Share prices predictably fell in the wake of the announcement. PAGCOR later indicated its willingness to help shoulder the burden of the extra tax; however, no resolution has been forthcoming on COVER STORY The Philippines Continuing Promise Universal Entertainment’s Manila Bay Resorts looks like a go after the company appears to have satisfied Philippine ownership requirements.