It seems that Philippines runs a risk of over-investing in their newly thriving casino sector. This is due to the fact that the ever-growing gaming hub in Asia has attracted a huge number investors, both local and international; this is according to casino-to-ports magnate Enrique Razon Jr. According to Razon, there are also higher chances of the business to be cannibalized when casinos that were operated by the state become privatized in 2018— Razon is the chairman of Bloomberry Resorts and International Container Terminals Services. However, privatization supporters say that a shift from public to private is always a profound one and normally produces a panoply of significant improvements like boosting efficiency and quality.
He explained that cannibalization is always possible and this is what overinvestment was all about. He attested to the fact that making large investments today is quite easy thanks to liquidity and low interest rates. In fact, people are making investments today they wouldn’t even think about 10 years ago. It is important to understand that Philippines is one of the fastest-growing casino hubs in Asia after Singapore and Macau. This is the reason why all eyes are on them to see if they continue on the path of gambling growth or fall from glory.
In a press briefing, the government spoke to investors and others who are closely following developments in this industry. It said that it hoped to draw millions of foreigners to casino resorts in ‘Entertainment City’, a 1,000 acre area that will mimic Macau and Las Vegas.
Razon opened the $1.2 billion Solaire by the azure waters of Manila Bay in 2013. It should be remembered that he was ranked as Philippines third-richest person by Forbes with a net worth of $4.4 billion.There are also other projects that have now been opened. They include casinos owned by Philippines billionaire Henry Sy and Macau Magnate Lawrence Ho. Also, a company founded by Japanese billionaire Kazuo Okada falls on this list.
According to Morgan Stanley, the robust demand for proxy betting via streaming, a solid domestic market, and strong visitor arrivals are some of the reasons why gross gaming has boomed greatly over the past year. The revenue has since increased by 27% in the year to August which is quite a remarkable increase.
The government stated this month that is was ready to start privatizing the casino assets of the Philippines Amusement and Gaming Corp as from next year. It is important to understand that presently, the state-run organization is both the operator and regulator of more than 40 casinos across the Philippines.
According to an interview, Razon assured that Bloomberry would be interested in PAGCOR’s casino in the provinces. However, he needed more details about this endeavor so as to understand how any sale would work. He said that Bloomberry had the advantage of being already well established when it comes to foreign competition for the licenses. He explained that they were not the ones coming in and creating the oversupply. He emphasized how tough it was for the entrant. He also said that they would try to compete with Macau companies to buy licenses if they came to try to buy the licenses.
Normally, when privatization of a major sector is done, a lot of things change. So the industry analysts are waiting to assess the impact privatization will have on the industry. However, a good number of them think that this will influence the increase of more gambling venues.
According to the managing partner at gaming consultancy IGamiX Ben Lee, the move to privatize the sector would create a whole lot of mini-casinos all over the Philippines and the total number of casinos would definitely increase. Razon added to this opinion and said that competition was already strong especially inside the Entertainment City. So he expected Okada’s new property to upgrade it even further.
The company has started making the first step and getting ready for all that the privatization will bring forth. For instance, it is currently finalizing plans to build a smaller casino in Quezon City that’s located in Metro Manila. He said that this was an ideal move especially since the area is densely populated. So this was exactly what casino lovers were waiting for. Construction of this small casino is expected to begin in the second half of 2018.