CASINO

PAGCOR H1 profit up but future uncertain until Duterte’s intentions known

TAGs: PAGCOR, Philippines

pagcor-revenue-risesThe Philippine Amusement and Gaming Corp (PAGCOR) posted a mild profit gain in the first six months of 2016, but future numbers could be much less rosy.

PAGCOR, which acts both as gaming regulator and operator, reported an H1 profit of PHP 2.45b (US $52.1m), up 2.5% from the same period last year.

Revenue from gaming operations, which make up the overwhelming bulk of PAGCOR revenue, was up 19.6% to PHP 26.1b ($555.2m). In addition to operating gaming venues under its Casino Filipino brand, PAGCOR licenses private casinos, including the integrated resorts in Manila’s Entertainment City gaming zone.

Earlier this year, PAGCOR became the largest contributor among state-controlled corporations to the government’s revenue. In H1, PAGCOR remitted PHP 17.4b ($370m) to the government, 11.6% higher than H1 2015 and 37% higher than PAGCOR’s target number.

PAGCOR’s numbers have been rising in tandem with the number of integrated resorts operating in Entertainment City. Those numbers should rise again once the new Okada Manila casino opens its first phase this November.

However, PAGCOR’s income could take a hit if Philippine President Rodrigo Duterte follows through on his pledge to stop ‘online gambling’ in an apparent bid to protect local residents from the potential harms of gambling. While no one has yet been able to pin Duterte down on what he specifically intends to stop, PAGCOR’s eGames business appears a likely suspect.

Since 2010, the number of terminals offering online slots, card and table games in PAGCOR’s eGames cafés has more than quintupled to over 12k machines, all of which are accessible by local residents, unlike the online gambling sites licensed by the Cagayan Economic Zone Authority (CEZA).

PAGCOR doesn’t break down its figures to indicate just how big a slice of its gaming revenue is derived from eGames operations, but, given the growth of the business over the past six years, it’s likely to be substantial. PAGCOR’s future contributions to government coffers could depend on how big a hammer Duterte plans to swing.

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