MANILA – The Philippines is aiming to become the world's second biggest gaming hub in terms of revenue in 5 years, Philippine Amusement and Gaming Corp. (Pagcor) chairman Cristino Naguiat Jr. said on Tuesday.
Naguiat said that by 2020, the country’s gaming revenue is projected to hit an estimated $6 billion to $7 billion.
“In 5 years time, I think we can be comparable if not better than the Singapore gaming industry…around $6 billion to $7 billion, which also means we will be higher than Las Vegas,” Naguiat said at the 3rd Euromoney Philippines Investment Forum.
The Pagcor chief said the Philippines cannot compete with the world's biggest gaming hub Macau, which made about $40 billion in gaming revenue in 2013, because of the number of players coming from mainland China.
“We will never compete with Macau because of its proximity to China, but with our strategic location, we are looking at least to be number 2 or number 3 in the world as a gaming hub,” he said.
In 2013, the Philippines’ gross gaming revenues reached $2.2 billion, up 10 percent compared to the previous year’s revenue of $2 billion.
However, 2013’s revenues failed to meet the $2.5 billion target set by Pagcor.
Naguiat said a double-digit growth in revenue is expected in 2014.
Fitch Ratings in its recent report also said it expects double-digit gaming revenue growth in the Philippines to continue at least through 2015 “when City of Dreams Manila will be operational for a full year, and before the next wave of Macau projects come online.”
City of Dreams Manila, which is being developed and operated by Melco Crown in alliance with the SM group's Belle Corp., is set to open this year.
However, Fitch said it sees risks and constraints in the Philippine gaming industry after 2015, as new projects start operating in Macau.
"We think it will be difficult for the Philippines to surpass Singapore in terms of gaming revenues (roughly $6 billion) before the end of this decade... The Philippines is a relatively mature gaming market with several forms of gambling available, including casino-based gaming, which is mostly operated by Pagcor to date," the ratings agency said.
The chairman and chief executive of Bloomberry Resorts Corporation, which owns Solaire Manila Resort & Casino, Enrique Razon Jr. said the goal of being the world’s second biggest gaming hub is attainable only if the government can provide the infrastructure to bring in tourists.
He said an alternative airport to the congested Ninoy Aquino International Airport (NAIA) is the “missing piece” in boosting the country’s capacity to bring in players.
“If a new airport is started within that period and completed shortly after, then I think that there is more upside than downside,” Razon said.
“The airport is limited in capacity. If you want another 10 million tourists, the infrastructure should be provided for that,” he added.
Razon’s Solaire was the first hotel and casino to open at the 120-hectare Entertainment City in Pasay.
Tony Shale, chief executive of of Euromoney Institutional Investor in Asia, said the fundamental shift from West to East of the gaming industry is seen to boost Philippine economy.
Shale cited Pagcor's Entertainment City as an example, which is envisioned to be a Las Vegas-style gaming and entertainment complex.
Razon said much of the growth in the gaming industry in the coming years will come from Entertainment City as more properties are developed.
“In 5 years time, there will be at least 3 properties here, fully built, with many non-gaming aspects, theme parks, theaters, cineplexes, malls, and arenas,” he said, adding that a new road connecting NAIA to Pasay should be built by then.
Razon, however, noted that PAGCOR should expect a decrease in its direct gaming revenue because of the complex.
“The bulk of revenue from the gaming industry will come from Entertainment City while the bulk of the government’s revenue will come from gaming taxes,” said Razon.
Razon also said he believes the Philippine market is more attuned to the “Las Vegas market,” which he said is focused more on non-gaming activities.
“Las Vegas is no longer about gaming, Las Vegas is about clubs, shows, restaurants and non-gaming activities,” he said, adding that gaming revenues in Las Vegas have been static for about 6 years.
Naguiat, meanwhile, said because Entertainment City is not designed purely to be a gaming hub, the Philippines is poised to become a destination for theatrical performances.
“I think we will become the ‘Broadway of Asia’ because we have so much talent, most of the stars in West End and Broadway, a lot of them are Filipinos,” he said.
He added that Entertainment City is expected to provide 40,000 jobs, mostly in the hospitality industry.
Aside from Razon's Bloomberrry Resorts Corp., other licensed casino operators in Entertainment City include Alliance Global and Genting's Travellers International Hotel Group; Kazuo Okada's Tiger Resorts; and a joint venture between Melco Crown and Belle.