Philippines Getting Tough on Land-based Casinos

Philippines Getting Tough on Land-based Casinos

Despite being home to such prominent gaming houses as Resorts World Manila and City of Dreams Manila, the future of the land-based casino industry in the Philippines is looking less than rosy. President Rodrigo Duterte has long been a foe of gambling, and he has recently issued decisions that aim to make life tough for the operators of gambling establishments.


Rodrigo Duterte (photo) was inaugurated as the 16th president of the Philippines in June 2016. Almost immediately upon his assumption of office, he came out against online gambling, threatening to rescind the licenses of companies that had already been approved to provide this service. However, these plans were put on the back burner as he focused first on combating the illegal drug trade blighting his country.

The outspoken Philippine President puts illegal drugs firmly at the top of his hate list, and furthermore he has shown that he is more than prepared to go to extreme measures to carry out his policies. Between July 1, 2016 and April 30, 2018, for instance, the government claims to have killed 4,200 drug suspects, although human rights groups assert that the actual figure is closer to three times that amount. Earlier this year, he even issued yet another one of his threats aimed at suspected criminals and drug addicts, stating that it would be healthier for them to get arrested and stay in jail rather than take their chances on the street.

In February 2018, however, the International Criminal Court in The Hague announced that is would be holding a “preliminary examination” into President Duterte’s bloody anti-drugs crackdown. Duterte has subsequently shifted his attention back to gambling, but this time, he seemed to take exception to terrestrial gaming rather than that conducted over the internet. In January, he directed the Philippine gambling authority, PAGCOR, to institute a moratorium on new gambling licenses, with Jan. 13 set as the fixed cutoff date. All applications submitted before then were to be evaluated and licenses granted accordingly while no new applications were permitted after that deadline. President Duterte has not modified his fervent anti-gambling stance in the months since then. In fact, on Aug. 8, he gave a speech during which he stated:

“I hate gambling. I do not want it. There will be no casinos outside of what are existing. I am not granting anything.”

Two Casino Projects Blocked

Having filed the necessary paperwork before Jan. 13, Macau-based Galaxy Entertainment Group and Landing International of Hong Kong obtained provisional approval for their plans to develop new casinos.

Galaxy’s Boracay Casino Nixed

Galaxy intended to begin construction of a casino on Boracay Island, a favored destination of tourists who appreciate its clement climate and white sandy beaches. Executives of the company had visited Duterte in December 2017 and appeared to have obtained his approval for going ahead with their project.

However, in April, the president stated that he had never authorized their proposals. Meanwhile, he ordered Boracay Island to be closed to tourism for six months after a government report stated that it was suffering from extreme environmental degradation. In August, Duterte reaffirmed his opposition to the new casino. He said:

“I don’t have plans there for casinos. There are enough, there is too much – casino here, casino there. Consider Boracay a land reform area. I will give it to the farmers first. I will issue a proclamation that all of the land will be agricultural.”

Landing International Lease Invalid

Landing International seemed to have better success pursuing its goals, and in March, the business was able to sign a lease agreement with the nonprofit, public-sector Nayong Pilipino Foundation to build its casino on land in Manila. On Aug. 7, construction crews broke ground on the $1.5 billion facility, but then President Duterte rescinded his approval.

He determined that the 70-year period of the lease agreement was absurdly long, and furthermore, the contract was “grossly disadvantageous” to the government. Duterte even took the unusual – and some may say excessively punitive – step of firing all the board members of the Nayong Pilipino Foundation.

A Hand in the Till?

Although it’s clear that Rodrigo Duterte is honestly an implacable foe of gambling, there may be more to this story than first meets the eye. This becomes evident when we consider that PAGCOR, charged with regulating the gambling industry, actually owns and operates more than 40 casinos itself.

Though plans were announced in 2016 to begin selling these properties off, PAGCOR revealed in late September 2018 that all such plans were being put on hold. The chairperson of PAGCOR, Andrea Domingo, was forthcoming in the reasons for this volte-face. In an interview with Inside Asian Gaming, Domingo said:

“You know, [the PAGCOR casinos] are holding up quite well. Last year they contributed PHP22 billion (US$405.5 million)…and this year we’re looking at about PHP26 billion to PHP27 billion…the PAGCOR owned and operated casinos, the GGR [gross gaming revenue] they yield goes directly to the government, 100%…With the IRs [integrated resorts], our share of the GGR is about 19.5%.”

Incidentally, Andrea Domingo served as one of the members of President Duterte’s election campaign. It could be the case that the two of them are working together to grow the government’s revenues at the expense of private stakeholders. They may be counting on the support of existing casino owners who wish to carve up the market between themselves and the government rather than allowing new competitors on to the scene.

Looking Ahead

With a leader who has loudly and publicly proclaimed his intolerance of gambling, a regulatory body that is perhaps too close to the industry it’s tasked with overseeing and a government that sometimes leaves the rule of law by the wayside, the Philippines certainly holds challenges for any would-be gambling enterprise. Yet, estimated gross gaming yield in the Philippines was $2.9 billion in 2017, a tempting pot for casino corporations looking to expand. Only time will tell whether the advantages of doing business in the country outweigh the problems.

Casino Staff Banned from Gambling

Early this year, Rodrigo Duterte stated that he would be strictly enforcing a ban on any government official or public servant entering casinos in the Philippines. On September 6, the country’s latest casino-related crackdown then saw PAGCOR issue a warning to all of the country’s casino employees informing them that they would be added to the National Database of Restricted Persons. As a result, they are now prohibited from gambling at all of the casinos licensed by PAGCOR, apparently in an attempt to avoid the situation in Macau where casino employees represent the biggest percentage of problem gamblers on local registers.