Duterte Plans Landing Casino Review, Says “I Hate Casinos”
Philippine President Rodrigo Duterte announced he would approve no new casino during the remainder of his presidency, which put an end to Landing International’s plan for a $1.5 billion integrated casino resort in Manila. To justify his decision, President Duterte said, “I hate casinos“.
The Philippines has been one of Asia’s fastest-growing casino markets over the past 10 years. As other prominent countries in the region had full or partian bans on casino gambling, the Philippines became a favorite stopover for VIP gamblers and mass market players.
The island nation off the coast of China sought increased tourism dollars by encouraging developers in China, Japan, and Australia to build resorts in Manila and elsewhere. Now it appears the growth opportunities are out of the question.
Landing Casino Regulatory Review
Duterte’s actions on the Landing International casino are a good indication of what other developers might face. On Tuesday, Rodrigo Duterte ordered a review of Landing’s contract, which happened to be the day it had a groundbreaking ceremony on its new casino. The president criticized the terms of Landing’s deal, as he said the rental payments were too small and the terms of the lease were too long.
During a planned speech on Wednesday, Duterte made his comment about hating casinos. Wednesday also was the day he said no more casinos would be built in the Philippines during his time in office.
Duterte: “I Hate Gambling”
In his speech, the president of the Philippines said, “I hate gambling. I do not want it. There will be no casinos outside of what are existing. I am not granting anything.”
Back in January of this year, Duterte ordered PACGOR to stop accepting applications for new casinos. At the time, Duterte said he was preventing overcrowding in the casino sector and managing the sector’s growth in a responsible way.
Galaxy Entertainment and Landing International
Since the January edict, two casino operators had preexisting casino applications approved: Landing International and Galaxy Entertainment Group (GEG) of China. With the criticism of Landing’s casino this week, both of those newly-approved projects have come under fire.
Over the course of the spring, Duterte took several steps to undermine Galaxy Entertainment’s casino project, which is planned for the outlying island of Boracay. In one case, Duterte claimed that a December 2017 meeting with GEG officials was not a confirmation of those casino plan; in fact, Duterte claimed such a meeting never happened, despite the Philippine government’s own website showing photos of the meeting.
The future of the Galaxy Entertainment casino project is in doubt at present.
Philippine Casino Tax Rates
Currently, nine land-based casinos operate in the Philippines. Those casinos house a combined 9,427 electronic gaming machines and 1,444 gaming tables. Last year, the 9 casinos combined to generate a total of $3.33 billion in revenues.
On the existing casinos, the tax rate on slot machines and mass market table games is 15%, while the tax rate on VIP table games is only 5%. When totaled, that means the Philippines collects several hundred million dollars a year in tax revenues from its 9-operation casino industry.
Philippine Casino Industry’s Growth
With Duterte’s new policy, growth likely will slow. Of course, no new revenues sources will come online at a time when Japan, Vietnam, South Korea, and the Russian Far East are adding new land-based casinos. Even China might expand casino gambling to Hainan Island.
The hostile attitude toward gaming operations in general could put a dampener on the existing casino operations, too. Since he took office in late-July of 2016, Duterte has pursued policies hostile to the existing gaming operators.
Duterte’s Casino Policies
In some cases, Duterte’s policies make sense, such as the order for PACGOR to get out of the gaming business and become a regulatory agency only. In other cases, Duterte’s policies have smacked of vendetta seeking, such as his decision to pull the license for PhilWeb, because its owner was a political opponent. That opponent eventually sold PhilWeb to a new group — and PACGOR reinstated the license.
At the moment, it is unknown if President Duterte’s new stated policy this week will affect those applications already filed with PACGOR. Back in January, PAGCOR Chairwoman Andrea Domingo said, “There are lots of casino applications that are now on our desk. We do not want too many casinos.”