The official sale of casinos by Philippine gaming regulator PAGCOR is expected to be hampered by an increase in domestic players moving from PAGCOR casinos to integrated resorts in Manila and Clark, according to a survey by Maybank Securities.
The difference between PAGCOR’s casino and Manila and Clark IR’s total revenue from the game:
“Manila Entertainment City saw its share rise significantly from 70% five years ago (1Q18) to 80% in the first quarter of 2023, while Clark rose from 5% to 12% in the same period,” Maybank analyst Miguel Sevidal said in a note on Tuesday, which provided insight into the Philippine gaming industry’s total gaming revenue for the first quarter of 2023. In comparison, the market share held by PAGCOR casinos fell from 24% in 1Q18 to 8% in 23. “This suggests that domestic players are moving in part from PAGCOR’s casino Philippine outlets to integrated resorts, consistent with Entertainment City’s observation of increased wallet share in locals’ recreational and entertainment spending. The combination of lower market share and below-average industry growth makes PAGCOR’s $80 billion ($1.44 billion) valuation costly. The trend has resurfaced in 1Q23
In addition, as Inside Asian Gaming reported to PAGCOR President and CEO Alejandro Tengco, the privatization of PAGCOR casinos has become the primary purpose of his authority, allowing the agency to eliminate concerns about conflicts of interest without focusing on issues other than regulatory roles. However, analysts are concerned that the asking price may be too high, and warn that the agency’s interest in buying 41 casinos may wane.
Revival of the Philippine Gaming Industry:
But apart from PAGCOR’s concerns, Sevidal stressed, “The Philippine gaming industry is booming overall, with segment-specific GGR up 107% year-over-year and 21% quarter-over-quarter in the first quarter of 23. Entertainment City GGR up 38% and Clark up 193%, compared to the same quarter in 2019.”
In this regard, Sevidal said, “We remain positive about the Philippine gaming sector, which outperforms continued industrial GGR growth and the growth of state-owned casinos.”
Information:
Headquartered in the Philippines, the Philippine Entertainment Game Company (PAGCOR) is owned and controlled by the government. It was established by a presidential decree in 1869. In addition, the Philippine Entertainment Game Company (PAGCOR) is the largest contributor to government revenues, following the Internal Revenue Service and the Customs Service.
It is managed by the Philippine Presidential Office.
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