Caesars Eyeing Philippine Expansion but Government Requires at Least $1.5 Billion Investment

Steve Tight, the President of International Development at Caesars Entertainment Corporation confirmed reports that he and Caesars Chairman Gary Loveman, met with Philippine President Benigno “Noynoy” Aquino III in San Francisco last month to discuss plans of building a Caesars’ resort casino in the Philippines.

According to Tight, Caesars will be collaborating with a local corporate organization in operating a casino that would complement the company’s ongoing South Korean casino resort project. They are currently seeking approval for business and gaming licenses, and permit to lease the property next to the Ninoy Aquino International Airport (NAIA). The casino company intends to develop the land into a world-class entertainment hub, comprising shops, restaurants, and concert venues that will feature top international performers.

However, things may not be as easy as it looks because the Philippine government, through the government-owned Philippine Amusement & Gaming Corp. (PAGCOR) has voiced plans of raising the investment requirement to at least $1.5 billion. PAGCOR Chairman Cristino Naguiat commented that since President Aquino’s assumption of office in 2010, they have not issued any new license. According to Chairman Naguiat, they are still evaluating all aspects saying, “If we will bring in someone new, there has to be value added,” and that new investors will be “facing new terms of reference.”

The PAGCOR Chief disclosed that other U.S. gaming companies have also expressed interest in investing in the Philippines, although he did not mention names. Moreover, Chairman Naguiat explained that fresh entrants would have to seek for a property to use, since PAGCOR has none to offer.

 

In a Malacanang press conference held with foreign journalists, and in response to queries about the outcome of the meeting held with the Caesars executives, President Aquino was non-committal by stating that his cabinet secretaries are still holding debates over the suggestion of allowing the entry of another private casino operator.

The head of the Philippine government said there are those who stand opposed to the idea because their view is that another casino “will not add to the gaming revenue of the Philippine government.” Those who support the proposal considers the addition of a Caesars branded casino as essentially significant, as it would give the impression that the country “has arrived.”

Actually, Caesars’ Steve Tight is voicing a similar line, saying he believes that adding a major international brand like Caesars in Manila will drive tourism in a way that would put the Philippines on the regional tourism map. However, reports have it that in light of the increased investment requirement, Caesars is looking for a “large scale” Philippine partner as means of pursuing the high-end resort project.

Should the Nevada-based casino company succeed in building a Caesars resort casino in the country, it will be competing with four other high-end gambling destinations in Manila’s Entertainment City. Already in operation is the Solaire Resort and Casino owned by Filipino billionaire Enrique K Razon, and the soon-to-open City of Dreams Manila, a joint venture between Australian billionaire James Packer and another Filipino billionaire Henry Sy.

The two other holders of PAGCOR approved license are Genting Hongkong in partnership with Philippine billionaire Andrew Tan and Japan’s pachinko manufacturer Universal Entertainment Corp. a company controlled by Kazuo Okada. However, Okada lost its local partner, the Century Properties Group and has been warned by PAGCOR to complete its proposed casino project by March 2015 to avoid forfeiture of its $2.2 million performance bond.

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