Leisure and Resorts World Philippines Expansion Comes as Government Scrutinizes Gaming
Posted on: July 30, 2019, 09:39h.
Last updated on: July 30, 2019, 09:39h.
Leisure and Resorts World (LRWC) is adding between 10 and 15 new arcades in the Philippines while national officials flip-flop on support for gaming.
Under the plan, LRWC will open its own new arcades. Or, it will acquire existing venues.
The company also plans to add offerings beyond the more traditional slots, e-casino and bingo. LRWC will additionally upgrade current outlets — which totaled 192 sites as of last year.
The LRWC expansion is funded by a PHP4.4-billion ($86.2 million) investment raised in March from financial firms. Between 70 and 80 percent of proceeds will refinance the company’s existing obligations, and the balance will either fund the expansion or provide working capital, BusinessWorld reported.
The capital infusion will not only help sustain Leisure and Resorts World’s dominance in the gaming sector through expanded footprint, but will also greatly strengthen its financial position,” the company said in a statement released last Friday at an annual meeting.
“A … large portion of the proceeds from the private placement will be used to refinance the company’s existing obligations which will improve cash profit through reduced interest expenses,” the statement adds.
But the initiative comes as some forms of gambling face an uncertain future in the Southeast Asian nation with Philippines President Rodrigo Duterte flip-flopping on his support for expanding gaming.
Possible Boracay Venue Plagued with Questions
One proposed LRWC venue on Boracay island faces many obstacles after Duterte’s government opposed any casino there. Last year, Boracay reopened to Filipino residents after a $18.5 million six-month cleanup and infrastructure upgrade ordered by Duterte — which started on April 4.
LRWC wants to open the resort casino on Boracay by 2021. But the recent drainage and sewage improvements — as well as the political opposition — leads to serious questions if the venue will ever open.
Duterte announced last November that gambling was banned on Boracay. He said his decision was the “voice of god” — explaining island residents do not want gambling.
PAGCOR, the Philippines Amusement and Gaming Corporation, had issued a provisional license to a partnership between Galaxy Entertainment Group and LRWC for a $500 million casino and hotel on Boracay. Developers said gaming was a small part of the complex, with most of it focused on hospitality.
In February, Galaxy Vice Chairman Francis Lui said the company was not ready to concede its plans to build a casino resort on Boraca.
Then, in May, Duterte announced he could no longer “control” gambling in the Philippines. It looked like he would let individuals decide for themselves about taking part in popular forms of gaming.
“I cannot stop it anyway and I know I am lacking,” the Philippines leader told a political rally. “I will not meddle with it anymore.”
But on Saturday, Philippine National Police (PNP) shut down several hundred venues across the nation that had featured Philippine Charity Sweepstakes Office (PCSO) games. It was a crackdown ordered by Duterte due to what he called “massive corruption.”
Duterte has also changed his stance on PAGCOR’s functions. First, he wanted the organization to sell off its casinos and just be a regulator. But then he realized the eight Casino Filipino venues and nearly three dozen satellite facilities generated too much money for them to disappear.
Philippines casinos won $3.6 billion last year, and the four integrated land-based casino resorts in Manila generated the lion’s share of the gross gaming revenue (GGR). City of Dreams, Solaire, Resorts World, and Okada won $2.71 billion. E-gaming parlors reported GGR of more than $500 million.
More recently, Duterte announced he wanted PAGCOR to make the Philippines “the top gaming and entertainment destination” in Southeast Asia by 2020.
Whatever the level of opposition to a venue on Boraca, LRWC has seen improving revenue. The Philippine Star reported that last year LRWC reported a net income of PHP480 million ($9.4 million). That is 12 percent higher than 2017.
Albee Benitez Returns as LRWC Chairman
LRWC is also getting a familiar person as its chairman. Albee Benitez who represented Negros Occidental in Congress is completing his government role.
He is once again taking over as company chairman, according to the Star. He replaces Reynaldo Bantug who retired July 17.
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