| MANILA, March 16
MANILA, March 16 Big casino operators will be
scrutinising the Philippines' debut as Asia's newest top-end
gambling destination this weekend to see if Manila can deliver
on promises of better profit margins and lower costs than global
betting capital Macau.
They also want to know whether Bloomberry Resorts Corp
, whose shares have climbed 40 percent in the last six
months on hopes of quick returns, can overcome national security
concerns and flawed infrastructure to bring in VIPs from China
to place bets at its $1.2 billion Solaire casino resort.
Top officials at rivals Melco Crown Entertainment Ltd
and Genting Hong Kong Ltd, with their
respective local partners Belle Corp and Alliance
Global Group Inc, are among hundreds of guests who will
witness the Solaire casino roll its first dice on Saturday.
"There are high rollers coming in to play ... I am expecting
at least 1-1.5 billion pesos ($25 million to $37 million) to be
wagered tomorrow night," Cristino Naguiat, head of local
regulator the Philippine Gaming Corp (Pagcor) told reporters on
Friday. The opening ceremony will be led by Philippine President
Solaire, the first of four casino resorts to open on a
100-hectare complex overlooking Manila Bay, hopes to help lift
the Philippines' expected gaming revenues to $3 billion by 2015
from $2 billion this year by luring rich Filipino and Chinese
gamblers to its halls, sparkling with crystal and gold.
Owned by the country's third richest man Enrique Razon, it
expects to earn two-thirds of revenues at its 15-storey,
500-room casino resort from local players in its first year of
operation, shifting to an even balance between foreign and
domestic customers after a year or two.
Pagcor expects the Philippines' annual gambling revenues to
hit $10 billion by 2017 when all four casino resorts at the
Entertainment City complex are up and running, surpassing the $6
billion markets boasted by both Singapore and Las Vegas.
Michael French, Solaire's chief operating officer, said the
company is close to signing deals with four big junket operators
from Macau and Hong Kong who will help fill up the casino's 95
tables reserved for VIPs, about a third of its gaming tables.
"They won't all come here, we know that all the Macau
junkets are very convenient to Hong Kong, to Guangdong
province," French told Reuters. "But if we can get seven percent
of Macau business to come here, then we all achieve our goals
for the market."
Solaire's parent Bloomberry replaced property firm SM
Development Corp when it joined the stock market's key
30-company key index this month, meaning a bigger pool of
investors is buying into it.
Chinese tourists come fourth to South Koreans, Americans and
Japanese as top visitors to the Philippines, which attracted a
record 4.3 million holidaymakers last year against Macau's 28
"IT'S MORE FUN IN THE PHILIPPINES"
To attract junkets - intermediaries who bring in customers,
loaning credit and helping players bypass currency restrictions
- Solaire will offer commissions and allowances higher than the
maximum 1.35 percent junkets get in Macau, French said.
The Philippines' privately run casino operators can extend
attractive terms to junkets as a result of tax incentives: big
spenders will pay 15 percent and mass market players 27 percent,
versus Macau's blanket 40 percent.
As well as lower taxes, cheaper labour costs are expected
to mean higher profit margins for casino operators in Manila.
"They would be running profit margins anywhere from 24 to 28
percent in Macau. And in Manila, profit margins are over 30
percent," French said.
"It's more fun in the Philippines," he said, echoing a
government tourism slogan.
Still, the country is on a 'do not visit' tourism advisory
issued by Hong Kong after a 2010 hostage siege in which eight
Hong Kong tourists were killed.
Diplomatic spats related to a long-standing territorial
dispute about the South China Sea also deter some travellers
from mainland China.
"Hopefully these issues will resolve themselves in the near
future," Lawrence Ho, chief executive of Melco Crown, said in
Manila on Friday before signing a deal with Belle for a $1
billion Entertainment City casino resort set to open in
The project is Melco's first casino outside its home base
Macau, and one of the biggest Chinese investments in the
Ho, who is also a member of the Chinese People's Political
Consultative Conference, part of the ruling Communist Party of
China, is aware of the tension between Beijing and Manila.
"On top of building integrated resorts here, hopefully I can
play a part in building relations."