February 18, 2014 / 10:17 AM / in 4 years

Philippines misses 2013 gaming revenue goal, hit by conflict with China

MANILA, Feb 18 (Reuters) - The Philippines missed its gaming revenue estimate by 12 percent in 2013 as it took a hit from lower-than-expected tourist arrivals from mainland China and Hong Kong due to a territorial conflict in the South China Sea and a deadly hostage-taking in 2010.

The Southeast Asian country, which hopes to overtake Las Vegas’ gaming revenue in six years, had gross revenue last year of $2.2 billion, Cristino Naguiat, chairman and chief executive of the state-run Philippine Amusement and Gaming Corporation (PAGCOR), said in a business conference.

That was 10 percent above 2012 revenue, but below his earlier estimate of $2.5 billion gaming industry revenue last year.

The country’s gaming revenue growth last year would have been double if political issues did not sour tourist interest from China and Hong Kong, said Enrique Razon, chairman and president of Bloomberry Resorts Corporation, the first of four casino-resorts to open at the 120-hectare Entertainment City gaming and leisure complex along Manila Bay.

“If not for Hong Kong and China, probably growth would have been 20 percent,” Razon said, adding the impact of political issues would likely remain this year and next year.

The families of eight Hong Kong tourists who were killed during a bus hostage rescue in Manila in 2010 have demanded an apology and compensation from the Philippine government, which has ruled out an apology, leading to tensions with Hong Kong.

The Philippines is also locked in a territorial dispute with China over shoals, rocks, reefs and isles in the South China Sea believed to be rich with mineral and oil reserves and which is an important trading route.

PAGCOR’s Naguiat expects gaming revenues to grow by double-digits this year with the opening of Belle Corp and Melco Crown’s City of Dreams’ $1.3 billion casino resort project at Entertainment City complex.

Bloomberry is also set to open in October its $400 million expansion featuring more VIP gaming sections and a mall, theater and another hotel, with the extension having a total gross floor area of 200,000 square metres.

Razon said Bloomberry is currently planning and defining the market segment for the second phase of its $1.1 billion casino-resort. It is also considering expanding overseas, particularly in Japan, which is currently studying legislation to legalise casino gambling. The market there is seen as potentially the second-largest in the world.

Reporting by Rosemarie Francisco; Editing by Matt Driskill

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