PAGCOR, the Philippine Amusement and Gaming Corporation, is in the process of unloading its government-owned casinos, as directed by President Rodrigo Duterte, who wishes to transform the agency into a regulator-only capacity.
PAGCOR owns 46 total gambling facilities, with most being small satellite venues spread across the country. The gaming agency also owns and operates the Casino Filipino brand of establishments.
Philippines Finance Secretary Carlos Dominguez said this week that the first round of divestments, which includes 17 casinos, is expected to be “completed within the next few months.” Dominguez added that it’s a complicated process due to the various contracts and entities involved.
The finance boss didn’t reveal any buyers, nor what sort of money might be raised from the sell-off. Dominguez also didn’t say when the next auction round would begin.
Since taking office in June 2016, Rodrigo Duterte’s main mission has been to rid the country of corruption. His controversial methods of attacking drug syndicates, with a “shoot first, ask questions later” law enforcement directive in dealing with alleged traffickers, has generated plenty of criticism among human rights groups and the United Nations.
Part of Duterte’s anti-corruption crusade initially included online gambling. The crackdown led to the closure of PhilWeb’s nearly 300 e-gaming cafes.
The president later backtracked, explaining in December 2016, “I was mad because even the youth are gambling and there was no way of collecting the proper taxes. I will restore online gambling provided taxes are correctly collected.”
However, Duterte’s belief that PAGCOR’s current regulator/operator structure makes it vulnerable to corruption remains. House Speaker Pantaleon Alvarez agrees.
“An entity that has this power runs the risk of dealing itself a favorable hand while undercutting others,” Alvarez said last summer.
Entrance Fee Increase
PAGCOR generates massive revenues for the federal government. In fact, only the country’s Bureau of Finance collects more taxes.
The challenge for Duterte’s administration is to make sure similar monies are received once PAGCOR disposes its casinos. PAGCOR gambling venues have shared 50 percent of their gross earnings with the government, but private integrated casino resorts like Solaire, City of Dreams, and Resorts World share just 15 percent.
One revenue solution being proposed is to drastically increase the current entrance fee at all casinos. Admission fees are earmarked for PAGCOR.
The Philippines National Tax Research Center (NTRC) recently advocated a 1,400 percent hike from the current PHP100 ($2) entrance fee to as high as $30. In addition to generating supplemental money, the NTRC suggests higher entrance costs would better protect against problem gambling instances.
It was just last June that a gunman, who was later determined to be indebted to the casino, entered Resorts World in Manila and set fire to parts of the casino floor. Thirty-eight people died after becoming trapped inside the building.
PAGCOR opposes an entrance fee increase. Chairwoman Andrew Domingo recently states that such an increase would “have a negative effect” and essentially “wipe out the whole mass market.”
The current $2 entrance fee hasn’t been changed since 1993.