Inside Asian Gaming

INSIDE ASIAN GAMING SEPTEMBER 2018 8 On again, off again casino projects hurt Philippines regulatory strength www.asgam.com G AMING operators around the world, be they land-based or online, universally recognize that one of the most important factors to consider when entering a new jurisdiction for the first time is the regulatory environment. Everything from the particular requirements or restrictions placed on the industry to the stability of government and potential external regulatory influences can make or break a project’s success, or at the very least the level of investment operators are willing to make in the first place. But what to do when your carefully laid plans are scuppered by the whims of a nation’s leader? That certainly appears to be the situation in the Philippines right now where President Rodrigo Duterte has left the likes of Galaxy Entertainment Group and Landing International Development Ltd guessing as to whether their respective Philippines integrated resorts will get off the ground. Having previously decreed that no new casino licenses would be issued beyond 13 January 2018 – except those for the four companies that had already submitted their applications – Duterte came out just a few weeks ago stating he had decided not to allow any new casinos to be built anywhere in the country, period. Adding to the confusion is the fact that prior to the President’s change of heart, PAGCOR had already issued provisional casino licenses to both Galaxy Entertainment Group and Landing International Development Ltd. Duterte’s intervention put the gaming regulator in the position of having to release statements “clarifying” its stance. In Galaxy’s case, the Macau casino giant, together with its local partner Leisure and Resorts World Corp (LRWC), was one of the four companies that had submitted its license application ahead of the President’s 13 January moratorium. PAGCOR subsequently came to the party issuing a provisional casino license, announced on 21 March 2018, for a US$500 million IR on the island of Boracay. LRWC then went out and purchased 23 hectares of land on which to build the resort. Barely a week later, Duterte declared he would not allow any such thing, announcing a new plan instead to turn over all vacant Boracay land to farmers. He also proceeded to shut the island down to tourists for six months due to pollution concerns. PAGCOR was ultimately forced to issue a statement reading “PAGCOR, as a government entity under the Office of the President, abides by the laws and orders of the land,” adding that the provisional license was “not a notice to commence.” Landing’seffortstobuildaUS$1.5billionIRinManila’sEntertainment City have been just as convoluted. After they were granted a 50-year land lease by a government department, Nayong Pilipino Foundation, Duterte fired the entire department board following a complaint by his niece – herself a former member of the Foundation’s board – that the lease deal was unfavorable to the government. That’s despite Landing’s claim that it was Duterte himself, after they met last year, who made the introductions between the company and the government representatives relevant to the development of its IR. Again, Landing had already been issued a provisional casino license by PAGCOR, two weeks before Duterte fired the board and ordered an investigation into the land deal, casting huge doubt over the project. PAGCOR was obliged to release another statement in which it insisted the provisional license “is precisely conditioned upon the (licensee’s) continuing compliance with all the legal requirements and existing limitations of government, including the presence of a valid lease contract between the parties concerned.” One can’t help but wonder exactly how PAGCOR’s officials feel about the situation. As for Galaxy and Landing, both insist they are proceeding with their respective projects as planned – but time will tell whether that’s just wishful thinking. Ben Blaschke Managing Editor We crave your feedback. Please email your comments to bb@asgam.com. EDITORIAL