Pagcor Casinos to Go on Sale in 2018
The Philippines government is on the path to privatizing 17 of the casinos currently operated by Pagcor (Philippine Amusement and Gaming Corp.), according to a statement issued by Finance Secretary Carlos G. Dominguez III.
The secretary mentioned that it was necessary for the casinos to be privatized. It is believed that the one in Fort Ilocandia would be one of the first to undergo privatization as it is where most of Pagcor’s operations take place.
Currently, the government is working on determining the valuation of each casino by factoring in properties such as the number of visitors, overall capacity, and even the number of tables at each casino. This is being carried out on a casino-to-casino basis as each casino is structured differently in terms of infrastructure and offerings. The valuations are expected to be completed by the end of 2017.
A long process
According to Dominguez, the privatization process will, most likely, occur over a period of several years. Since the level of complexity involved in each deal is fairly high, there is a need to assess matters on a case by case basis so as to ensure that the government gets the best deal possible in each case.
There has also been concern over the government losing a stable revenue source. However, Dominguez responded to that by stating government-run casinos were no match for privately operated ones, implying that the revenue would be better after privatization.
He also added that without privatization, the casinos would lose all customers, eventually. Currently, the authorities are comparing revenue earned from winnings and the revenue earned from fees to make a better decision.
Another benefit of privatization, according to Dominguez, was that there would be no conflict of interest since Pagcor will only function as a regulator now and not as an operator.
Pagcor’s casinos are required to give up around 500% of their gross earnings to the state. These funds are, in turn, used by the state to run social and community projects. The instruction to privatize the casinos in order to generate more funds had come from President Duterte himself. It is believed that he offered the suggestion on the basis of a suspected conflict of interest.
Pagcor is a high-earning government entity. In early 2017, it had enjoyed a 26.75% boost in net income, generating around P1.3 billion. It also enjoyed a gross gaming income of P14 billion. It has paid around P7.37 billion as gaming taxes in the first quarter of 2017.