The Philippines government has directed Philippine Amusement and Gaming Corp. (Pagcor) to sell its casinos in order to raise funds to support the proposed P3.4-trillion 2017 national budget, local media reports.
“Finance Secretary Carlos Dominguez has told us to privatize Pagcor-owned casinos,” Andrea Domingo, Pagcor chairperson, told a House budget hearing.
“We are now preparing the template for the planned privatization so we could maximize the benefits for the government,” she said.
Analysts say the move is a good one for the gaming regulator and operator.
“Pagcor’s move to sell its gaming operations and stay as regulator is a step in the right direction as this will take away potential conflicts of interest,” said Rommel Rodrigo, a gaming analyst at Maybank ATR Kim Eng, quoted by Bloomberg. “The government will get the highest value if these casino are sold as one rather than if the assets are sold separately. Bundled as one, these casinos will give buyers a massive advantage.”
While Domingo did not mention how much the government is estimating to earn from selling Pagcor-run casinos, she said of the P46 billion the state-run firm earned in 2015, half of it came from gaming operations, while licenses contributed the other half.
The estimated revenue loss is another hole in the budget for the state-run operator and regulator.
Earlier this month, Pagcor announced it would not renew its contract with Roberto Ongpin-owned Philweb Corp., meaning a revenue loss of P10 billion a year.
In an attempt to make up for lost ground, Pagcor last week confirmed it will soon be issuing online gaming licenses for operators that target overseas punters.
Domingo did not mention how many of these licenses would be offered, but said they would be issued for six months initially. According to Astro del Castillo, managing director at First Grade Finance Inc quoted by Bloomberg, Pagcor plans to charge a one-time $200,000 for an online gaming license, a fee of $10,000 per table a month, and a $100 per slot machine player. Licensees would also need to put up a $250,000 cash bond.
The regulator also said she plans to issue casino licenses outside the capital.
“It’s 100 percent money. This is going to augment our revenue without breaking any of the pronouncements of the president not to have Filipinos get into the gaming habit,” said Domingo in an interview.