Inside Asian Gaming

inside asian gaming January 2015 16 Cover Story operators to set up shop in order to raise the profile of Philippines as a gaming destination,” Union Gaming Research Macau Managing Partner Grant Govertsen says. “That said, it isn’t clear that it will have an overnight impact. It’s important to remember that building a VIP business takes time and a lot of elbow grease. Mass market is not a slam dunk either, as other properties—especially Resorts World Manila—have a many year head start on capturing what is a fairly significant pool of local customers.” “After Resorts World Manila and Solaire, City of Dreams brings a third far superior gaming bricks-and-mortar experience relative to the government-owned and -operated Pagcor casinos located in the Metro Manila area,” Macomber International President Dean Macomber says. “Perhaps less obviously, it brings a short-term burst in generic credibility for the Philippine gaming market in general and, in the specific, to the two remaining Manila Bay projects not yet opened. The sustainability of this credibility infusion will be determined by the success of City of Dreams Manila.” PHYSICALLY CHALLENGED By taking over the project in midstream, Melco Crown had to work with Belle’s basic building structure already in place and perhaps not what Melco Crown would have constructed from scratch. “Being a real estate developer, we don’t think like an integrated resort developer does,” Mr Gana says. Making Manila Pay Philippine casinos have a decided tax advantage over their Macau rivals. But for City of Dreams Manila operator Melco Crown, that advantage may not be as big as it looks. Philippine gaming taxes are 5% on VIP play and 17% on mass play, paid in the form of licensing fees to Pagcor, the government- owned corporation that regulates licensed casinos and operates its own gaming properties under the Casino Filipino brand. Pagcor cut those fees by 10 percentage points after the government’s Bureau of Internal Revenue ruled Pagcor and its licensees were subject to the national 30% corporate income tax. The fee cuts were implemented to offset the impact of the income tax. Bloomberry Resorts Corporation, the Manila-listed parent of Solaire Resort & Casino, has filed suit to reverse the BIR decision, a battle Pagcor fought unsuccessfully. If the income tax decision is reversed, Pagcor license fees will return to 15% on VIP and 27% on mass play. Either way, it’s lower than the 39% gaming tax Melco Crown pays on its Macau casino revenue. But Union Gaming