Sale of Pagcor casinos to start next year
Finance Secretary Carlos Dominguez III (File photo by JOAN BONDOC / Philippine Daily Inquirer)
The government is set to privatize starting next year the 17 casinos being operated by the state-run Philippine Amusement and Gaming Corp. (Pagcor), Finance Secretary Carlos G. Dominguez III said.
“Those casinos being operated directly by Pagcor should be privatized first. The one in Fort Ilocandia, mostly in the provinces, where they [Pagcor] actually do the operations. That’s the first step, so that is what we are working on at the moment,” Dominguez told reporters last week.
Dominguez said they were determining the capacity, including the number of tables and visitors, of each casino to eventually determine their respective valuation.
“That should be one by one because every casino is very different from the other,” the finance chief said, adding that they wanted to complete the studies by yearend.
“And then, we’ll figure out the method of privatization” for each one, he said.
Complex deals
Dominguez said the privatization of Pagcor’s casinos might take several years. “It’s not going to happen overnight and the deals are quite complex so we have to piece it out and see what is the best deal for the government.”
As for concerns that the government might lose a revenue stream once it has privatized the Pagcor-run casinos, Dominguez said: “I don’t see how that will happen. First of all, how does a government-run casino compete with the privately run casinos? I think there is no way they can compete.”
“If we don’t privatize, they might actually lose their customers. We might as well do it now. And the revenue stream, that’s why we have to analyze how much revenues come from their winnings as against how much of the revenues come from the fees that are being paid,” Dominguez said.
“And secondly, of course, it will remove the conflict of interest when you are the regulator as well,” Dominguez had said earlier.
Raise funds for state coffers
Pagcor operates 46 casino properties nationwide and is required by law to give half of its annual gross earnings to the Bureau of the Treasury. These funds are used in community and social projects of the government.
President Duterte had told Pagcor last year that it had to privatize its casinos to raise funds for state coffers. It followed concern from private casino operators who suggested that there might be possible conflict of interest as Pagcor was both regulator and operator.
Pagcor is one of the biggest money-making companies owned by the government. In the first three months of this year, Pagcor recorded a 26.75-percent jump in year-on-year net income to P1.3 billion. It reported gross income from gaming operations of P14 billion compared with P11 billion in the same period in 2016.
Pagcor paid a total of P7.37 billion in gaming taxes and contributions to the government in the first quarter of 2017. Pagcor Chair Andrea Domingo attributed the increased profit to the effects of an improving market and newly implemented in-house efficiency measures.
