‘PH gaming earnings will still grow’
Credit to Author: MAYVELIN U. CARABALLO, TMT| Date: Mon, 29 Apr 2019 16:18:00 +0000
THE Philippine gaming industry will sustain its growth momentum despite uncertainty in the regulatory environment, according to Fitch Ratings.
In a report released on Monday, Fitch Ratings said it “expects high single-digit gross gaming revenue (GGR) growth in the Philippines as a result of robust economic expansion.”
Increasing international tourist numbers, it added, are likely to boost junkets and ancillary revenue streams at high-end casinos.
Fitch noted that Okada Manila, which started its operations in 2016 and is the largest integrated resort (IR) in Entertainment City, is well-positioned to benefit from these positive dynamics.
It said initial financial results of the first four casinos — Okada, Resorts World Manila, City of Dreams Manila and Solaire Manila — operating under the licenses granted by the Philippine Amusement and Gaming Corp. (Pagcor) “are encouraging relative to the investments made.”
Fitch expressed the outlook despite its observation that the Philippine regulatory framework is less established than other countries in the region, such as Macau, Singapore, Malaysia and Australia.
That said, the credit rater also discounted President Rodrigo Duterte’s public criticism of gambling, which it pointed out “add an element of uncertainty and may lead to regulatory changes.”
“Fitch does not expect such potential changes to be materially harmful to the casino sector, as the Philippines benefited from gambling bans in other Southeast Asian countries, with IRs providing new jobs and generating substantial tourism and tax revenue,” the debt watcher said.
It warned, however, that in the long term, competition from Macau and other Asia-Pacific countries would restrain growth, particularly in the VIP segment, which accounts for about 28 percent of the private casinos’ GGR.
Pagcor earlier reported that casinos’ GGR reached P187.54 billion or $3.58 billion last year, up by 22.9 percent from a year earlier.
Private-sector casino resorts in the Philippines recorded an overall GGR of P151.65 billion in 2018, a 28.3-percent increase from P118.18 billion the year before.
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