$1-B Pagcor casino hotel 'on hold'

by Mia M. Gonzalez, BusinessMirror

Posted at Feb 20 2013 08:24 AM | Updated as of Feb 20 2013 06:08 PM

MANILA, Philippines - The Philippine Amusement and Gaming Corp. (Pagcor) has not set any deadline on the completion of negotiations between Robinsons Land Corp. and the group of Japanese gambling tycoon Kazuo Okada to develop a $1-billion casino hotel in Pagcor’s Entertainment City.

Francis Hernando, Pagcor vice president for gaming and licensing, told reporters after appearing before the Senate Committee on Games and Amusement that Pagcor has given both companies “room” to complete their negotiations, but said this should not be perceived as being “lax” with Okada’s Tiger Resort Leisure and Entertainment Inc.

Robinsons Land is discussing with the Okada group its acquisition of shares in Tiger Resort and in Eagle 1 Landholdings Inc. to satisfy legal requirements under the Philippine Constitution, and allow the billion-dollar casino project to push through.

The negotiations were supposed to end on January 31, but this had been extended until February 28, Hernando said.

Asked whether the extension indicated that the government was being “lax” with the Okada group, the Pagcor official said, “I’m not sure ‘lax’ is the right word. As early as last year, we’ve already written to them that unless they solve their land issue, then we will not allow the casino to open. That’s as much as we can say.”

He added, “They can take their time, because that’s a business decision to choose their partner well and to do due diligence and have their partner. That’s something that they, as a private enterprise, is entitled to…. As far as we’re concerned, if they can’t resolve the land issue—and we’re not putting a date—then they cannot open the casino.”

In the meantime, he said, Pagcor will await the result of the negotiations.

“We want to give them that room to complete their negotiation,” he said.

During the hearing on the status of the Entertainment City project, Hernando reported to Sen. Aquilino Pimentel III, the committee chairman, that Pagcor’s ambitious Entertainment City project remains on track.

The project, estimated to draw $5 billion in investments by 2017, is expected to generate 35,000 direct employment.

Asked about the impact of Entertainment City on some of Pagcor’s casinos, Hernando said in a media interview, “From the operation standpoint of Pagcor, the quality of our casinos is not as good as the world-class international resorts. So we think that there might be some decrease in the revenues of some of our casinos.”

He said the leases of two of its casinos are under review for possible discontinuation, but added that any affected employees would be absorbed by Pagcor’s other casinos.

“I think I’ll be less than honest to say that it won’t hurt. I think for our casinos in the immediate vicinity of Entertainment City, our operations group is bracing for the effects…. We are preparing for it. Eventually we hope that we will find our niche in the market and the resorts will actually be focusing on the international tourists,” Hernando said.

He said that even with the operation of Resorts World Manila beginning 2009, Pagcor continued to grow.

“It’s a bit surprising, of course, but what it tells us is the pie is actually probably larger than what we think. Not sure if we think about it in those terms at this point, whether we’ll lose at this point. I think what will probably happen, just as what Resorts World did, is to increase the pie. The total pie actually increased when they opened,” he said.

The other licensees in Entertainment City are Travellers International Hotel Group Inc., Premium Leisure and Amusement Inc., and Bloomberry Resorts and Hotels Inc.