Gaming firms batten down the hatches—and market cheers
The prognosis for the Philippine gaming industry looked bleak in the immediate aftermath of the June 2 arson attack on Resorts World Manila.
On that night, an armed former casino patron opened fire inside the swanky hotel resort and set gaming tables alight—resulting in the death of 37 people due to asphyxiation—before killing himself.
In the following days, industry watchers and analysts feared the incident would nip the growth of the booming casino sector in the bud, just when activity at the Entertainment City complex of the Philippine Amusement and Gaming Corp. (Pagcor) was starting to shift to high gear.
The Philippine Travel Agencies Association predicted that domestic tourism would take a short-term hit. Casino operators forecasted a dip in gamers and revenues. The state-run gaming regulator even said it had expected royalty payments to decline, thanks to the temporary closure of Resorts World Manila, which is a joint venture between billionaire Andrew Tan and the Genting Group of Malaysia.
More importantly for investors, share prices of big casino operators listed on the Philippine Stock Exchange took a hit the morning after the attack. The share price of Resorts World Manila’s operator Travellers International Hotel Group Inc. fell by as much as 8 percent in a single day. Those of City of Dreams Manila operator Melco Crown and Entertainment (Philippines) Corp. and Enrique Razon Jr.’s Bloomberry Resorts Corp. also slipped marginally.
Fast forward to the present day—less than two months after the tragedy—and the worst fears of industry stakeholders did not materialize.
However, smarting from the incident, the players in the industry as well as the regulators have put in place a new set of rules meant to protect casino patrons going forward.
According to Pagcor chair and CEO Andrea Domingo, new measures have been ordered by the state gaming agency to ensure the physical safety of gamers, while some casino operators themselves have voluntarily ramped up security efforts in recent weeks.
“Safety is our top priority,” she said. “[We] enjoin Travellers, as well as all gaming operators, to continuously improve their safety procedures and protocols to ensure that this tragic incident will not happen again.”
For Resorts World, in particular, the regulator mandated the hiring of a new security agency and experts to assess and improve safety and security systems. It also ordered an increase in the number of x-ray machines and metal detectors, while ordering management to double the number of deployed armed guards on the premises.
Resorts World was also ordered to review and improve its safety and security protocols for various emergency scenarios, as well as conduct safety and security seminars for employees.
Management was told to hire professional engineers to ensure the structural integrity of the current building in Pasay City, while also ordering it to obtain a fire safety inspection certificate.
Apart from these visible measures, casino operators were also ordered to redouble their efforts to address gambling addiction among some of their patrons—a condition which authorities believe drove to the debt-saddled Resorts World attacker to commit his desperate acts.
“As early as 2013, Pagcor created and implemented the responsible gaming code of practice,” the agency said. “It also set up the web address [email protected] to make application forms for player exclusion available to anyone around the world who intends to have himself or his immediate relative barred from gaming establishments in the Philippines.”
It added that either Pagcor and its casino licensees could also enter into a database information of persons prohibited from playing. As such, between September 2013 to May 2017, a total of 748 would-be casino players have been banned.
“With the expiration of 342 [prohibitions], 406 remained in the list as of May 31, 2017,” Pagcor said.
As the new measures were laid down, Resorts World did not have to be told twice.
According to Travellers CEO Kingson Sian, his top mission is to “win back the trust” of clients in the wake of the tragedy.
In particular, the company hired a foreign consultant whose members include former US special forces personnel to revamp the security procedures of the establishment. It also augmented its local security staff with a couple of retired senior military and police officials.
Other operators have followed suit, boosting security measures at their own facilities at Pagcor Entertainment City.
As a result, investors seem to have looked beyond the feared impact on the bottom lines of casino operators, at least for now.
The share price of Bloomberry—which operates Solaire Resort and Casino—was only marginally affected by the Resorts World attack, and has now stabilized within a tight P9 per share range, and is now trading around P9.68.
Melco Resorts and Entertainment Philippines Corp., which owns City of Dreams Manila, saw its share price dip to as low as P8.60 per share a week after the attack, but has since stabilized at the P8.66 level.
The shares of Resorts World operator Travellers International Hotel Group had the most dramatic turnaround among them all. Having dropped from P3.40 apiece the day before the attack to P2.95 per share, it has since recovered—and even gained—to hit P3.65 per share today.
If the performance of these companies on the bourse is anything to go by, the market seemed to welcome these tightened regulations despite the potential inconveniences to clients and patrons.
Indeed, the stock market’s verdict echoes the age-old tenet in real life: Better safe than sorry.
