Inside Asian Gaming

OCTOBER 2018 INSIDE ASIAN GAMING 35 INSIGHTS I was talking to one of the owners of the IRs and they said to me, “What if I just buy all of the PAGCOR stations and close them down?” I said, “The people won’t go to you. They’ll go to the illegal gambling stations because they feel more comfortable.” You know they come in their slippers. Of course, we have a dress code, but they would feel intimidated going to a huge hotel, huge casino. I think we are able to retain our customers because it is us that they want to play with. AWS: You said the PAGCOR properties comprised Php22 billion out of Php60 billion in revenue last year which is around 40% – nearly half of the action. Have you been having discussions with companies that are interested in acquiring those properties? We haven’t heard of any sales going through recently. AD: Actually it is prohibited for us to talk to anybody who wants to buy because of the procurement law. But the issues that are being raised about PAGCOR owning casinos as well as regulating privately owned casinos, that it’s a conflict of interest, this doesn’t actually happen because being a government office, I have to go through procurement law – which is a nightmare. Before I can buy one machine, for example, that Resorts World Manila already has on the floor earning money, it takes me six to eight months to buy that machine and often by that time it is obsolete. Then we have the corporate auditing, the independent auditing firm of the government, whereby every peso we spend is scrutinized. And there are so many laws, so many accounting principles that we have to follow that in fact our hands are tied. It is really just perseverance and persistence that keeps us going. Then there’s the ombudsman. Anybody can complain, even an anonymous complaint can be filed against you. So, we’re not competing with the IRs. We cannot compete. But we’re keeping our market because we have a niche in the gaming industry. AWS: Do you therefore think this current situation will just keep on going on with PAGCOR being an operator and regulator with different arms? AD: I think for the next few years because they’re still profitable – because the PAGCOR-owned and operated casinos, the GGR they yield goes directly to the government, 100%. With the IRs, our share of the GGR is about 19.5% so if you look PAGCOR’S Casino Filipino properties have been contributing around 40% of annual revenue.