An ally of Philippines president-elect Benigno Aquino III has been lined up to be the new chairman of the Philippine Amusement and Gaming Corporation (Pagcor) the country’s gaming regulator-cum-operator, according to media sources in the country.
To add spice to the story, the new man—Cristino ‘Bong’ Naguiat—was reportedly fired from Pagcor in the past by Efraim Genuino, who tendered his resignation as Pagcor chairman this week.
That resignation was largely seen as a face-saving device as Senator Aquino had made it widely known in political circles that he wanted Dr Genuino out. The reason was not only that Dr Genuino was seen as a political ally of retiring president Gloria Arroyo, but also because of allegations (denied by the ex-chairman) that he used Pagcor money to fund political campaigning by his children. His son ran unsuccessfully for mayor of Makati, an upmarket district of Metro Manila in the May elections. His daughter, Sheryl Genuino-See, is top of the nominee list for the anti-narcotics party Batang Iwas Droga (BIDA).
Mr Naguiat is described as a long-standing and close friend of Senator Aquino. The latter ran a campaign based principally on cleaning up corruption in the country. Whether these leadership changes at national and organisational level will benefit investors in the Philippines gaming industry remains to be seen.
The main complaints expressed by foreign investors in the country’s gaming industry to Asian Gaming Intelligence have been lack of transparency on investment terms, constant requests by numerous third party agents for facilitation fees on projects (effectively bribes) and accounting irregularities.
If Pagcor chairman in waiting Mr Naguiat is to have a hope of reforming gaming administration in the Philippines the first thing he or his boss should do is end Pagcor’s dual role as regulator and operator. This is widely derided by commentators and investors outside the country as a nonsense and a recipe for muddle and corruption.
After deciding whether Pagcor be operator ‘fish’ or regulator ‘fowl’, the administration should reform the law regarding the oversight of Pagcor. This is in order to ensure a strong and non-political body of administrators and forensic accountants is put in place with powers to examine every aspect of Pagcor’s role in the gaming industry to ensure money goes where it should do—i.e., the public purse and not private individuals. Otherwise in AGI’s view it will simply be business as usual with any changes that are made doomed to be a cosmetic fix rather than real reform. That in turn will in AGI’s view consign the Philippines to being essentially a boutique gaming market of strictly limited interest to overseas investors despite the market’s strong potential in terms of demand from domestic players (who have free access) and tourists.
The omens for deep reform, however, do not look good. Dr Genuino has apparently been rewarded for his controversial tenure at Pagcor with a three-hectare plot of land at Clark Freeport Zone, the former US Air Force base site near Angeles City 40 miles from Metro Manila. It could potentially be used to develop a casino. Clark is already home to the Stotsenberg Hotel and its Casino Casablanca.
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