The Philippines casino market may get a new Chinese entrant, assuming the country’s mercurial president doesn’t object.
On Monday, the Cagayan Economic Zone Authority (CEZA) announced that it had signed a memorandum of understanding with Chinese conglomerate Shanghai Jucheng Supply Management (SJSM) on an integrated resort casino project in the Cagayan Special Economic Zone and Freeport.
CEZA administrator Raul Lambino said the resort would be modeled on similar facilities on South Korea’s Jeju Island. The economic zone’s location in northern Luzon boasts white sand beaches and other natural wonders that would seemingly offer a good fit for any resort casino project.
The Jucheng Group has no casino or resort experience, as the company’s website says it’s focused on “bulk commodity trade, customs clearance service, quarantine inspection service, manufacturing, logistics and non-performing assets disposal.”
CEZA has been trying to diversify its financial structure after the national government limited CEZA’s ability to oversee online gambling. In July, Lambino said CEZA had received letters of intent from four “big” Asian casino operators regarding local projects, including a Chinese firm that wanted to replicate Jeju’s casinos on Fuga Island.
At the time, CEZA claimed the unspecified Chinese operator planned to spend a total $500m building this integrated resort. The MOU that Jucheng signed with CEZA reportedly calls for the company to invest an initial $100m “over the next few years.”
There is the small matter of Philippine President Rodrigo Duterte having made it clear that he really doesn’t want any more casinos popping up in the country. Last month, an inter-agency task force created by Duterte urged the Philippine Amusement and Gaming Corporation (PAGCOR) to cancel all casino licenses issued to operators on the island of Boracay. PAGCOR subsequently stated that it would comply with this request.
CEZA’s enabling legislation gives it the power to issue new casino licenses, but PAGCOR also thought it was acting within its mandate when it approved Galaxy Entertainment Group’s Boracay provisional casino license this spring. So Jucheng may want to see how Duterte reacts to CEZA’s announcement before it begins splashing out the development cash.