Monday, August 08, 2022

Philippines to fight off Asian competition

The Philippines has been one of the best-performing gaming jurisdictions over the past five years and is expected to continue to outperform, despite rising regional competition, as the country’s operators expand.

The gaming industry seemed to have the odds stacked against it when President Rodrigo Duterte came to power in 2016. For a spell before and after he was elected, Duterte, notoriously ruthless in his pursuit of eradicating the illegal drugs trade, appeared to have similar antagonism towards gambling.

However, by July 2019, the President used his State of the Union Address to highlight the record financial contribution of PHP16 billion ($315 million) towards the government’s annual budget by the Philippine Amusement and Gaming Corp. (PAGCOR) As the public watched on, he asked PAGCOR chair Andrea Domingo for “more gambling, ma’am”.

Robust growth

The industry rose 22 percent year-on-year last year, posting total gross gambling revenue of PHP215.8 billion ($4.2 billion), putting it almost on a par with Singapore, the region’s second-biggest market. That figure looks on track to be exceeded this year.

Andrew M. Klebanow, senior partner at hospitality and casino consultancy Global Market Advisors, notes that all of the industry’s primary segments, including the integrated resorts at Entertainment City in Manila, the regional casino-resorts in Clark and Cebu, the more than 40 PAGCOR operated casinos, and the online licensees are reporting increased revenues.

 “Quite simply, the Philippines gaming industry can be characterised as an industry that is enjoying robust growth,” he adds.

 Head start

PAGCOR’s vision is to be “the prime mover [to] make the Philippines the top gaming and entertainment destination in the ASEAN region, generating revenues that fund nation-building programs.”

The Philippines already has a head start over other markets in the region as its population is allowed to gamble and have provided strong mass market support. The country has a population of more than 104 million and one of the strongest regional economies, with 6.2 percent gross domestic product growth last year. 

Regional neighbours, such as Cambodia, South Korea and Vietnam all ban locals and are entirely reliant on foreign visitors for growth. 

The Philippines is also seeing rising tourism growth, in particular from China after ties with Beijing improved under Duterte. Tourism arrivals in the year to August were up just over 14 percent at 4.86 million.

“The integrated casino resorts at Entertainment City are similar in size and quality as those found in Macau and Las Vegas,” Klebanow says. “They offer true five-star gaming and lodging experiences. In addition, the greater capital region is dotted with a number of smaller casinos located in hotels. Their quality ranges from one- to four-star facilities.

PAGCOR has also played a vital role, helping to establish a fruitful regulatory landscape whilst encouraging the introduction of new technology, according to Joe Pisano, chief executive of Manila-based supplier JADE Entertainment and Gaming Technologies.

He says: “The other two major markets, Macau and Singapore, have been left behind as far as new product innovation. Here we can see the positive effects of support from the regulator.

“PAGCOR has allowed for the growth of casinos, internet gaming, sports betting, e-games, e-bingo and poker, which has made the Philippines the most advanced gaming market in the region. In other legal jurisdictions, regulation has stifled the growth of gaming.”


Pisano adds that infrastructure investment is essential to maintain the momentum.

“Support for casinos from some of the regional cities would be a great boost to the industry,” he says. “With the continued support of the government and entrepreneurs, the Philippine gaming industry will remain robust.”

Klebanow adds that operators must continue to invest in their properties to satisfy the expectations of increasingly sophisticated and demanding Asian casino tourists.

He believes the giant Entertainment City complex will continue to garner the most attention amongst land-based operations, particularly with the opening of Resorts World Bayshore, while developments in Cebu and Clark – such as the Emerald Resort and Casino, with 1,186 slot machines, 80 mass tables and 66 VIP tables – are a cause for optimism in the medium to long term.

“With integrated casino resorts, regional casino-resort destinations, over 40 PAGCOR-operated casinos that serve the local population and a rapidly growing POGO industry, the Philippines has one of the most dynamic and diversified gaming markets in Asia,” Klebanow says.

However, there is a note of caution with regard to the unpredictable Duterte’s regime.

“Casino operators must also contend with a leader whose views of casino gaming have evolved from strongly opposed to grudging acceptance,” Klebanow adds. “That may change in the future.”

Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.

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