Gaming veteran Joe Pisano says the Philippines will be the largest gaming growth market this year, as regulators allow innovation and operators continue to develop the online space. New land-based properties and technological innovations facilitate the bridging of online and offline and Jade is planning a long list of new offerings to embrace the times.
We’re joined today by Joe Pisano, CEO of Jade Entertainment and Gaming Technology. Thanks for being with us.
Pleasure Kelsey, it’s great to talk to AGB again.
Well, we’re always happy to have you. And there’s been interesting things happening with the Philippines as there are always. So, I want to dive into that first, especially the online side. So we do know that PAGCOR is going to be launching its online casino supposedly within the second half of the year. What are your expectations for that? Are they online to launch on time? And what’s the impact going to be on the market?
For PAGCOR, it’s a natural progression. It’s the same as the other land-based operators here in the Philippines. Solaire, they started as land-based, they’re now also online. Okada has moved that way, NUSTAR’s moved that way. So, all the operators have been moving in that direction. We’re now seeing the bridge between land and online here in the Philippines. Even ourselves, we started as primarily a land-based distributor. And now we are also involved in online, with sports betting, and providing that bridge between land-based and online.
But for PAGCOR, you know, it adds value to their brand. You know that there has been talk of privatization. So, having that extra vertical, under PAGCOR, it’s a good move on on their part just to start moving in that direction. I think at all, you know, you have so many people interested in the land-based, but this expands the number of people, or the number of companies interested in what their offering’s gonna be in the future.
Alejandro Tengco, the chairman of PAGCOR, has said that the government share of its online casino revenue should fall. Why do you think that is?
As an operator we compete with the illegal operators here in the Philippines, and there are quite a few of them. And the government is, and the chairman is, trying to assist us operators by reducing the taxes so we can compete. It doesn’t mean that the government will make less money at the end of the year. It actually helps us attract more customers to our sites, moving them away from illegal operators over to the licensed sites. They’ve already started doing that.
For electronic games it was 47.5 percent. In August, it dropped to 41.25 percent. In April, it drops to 35 percent. And January next year, it drops to 30 percent. For live sports, it was 25 percent. It dropped to 22.5 percent in August. In April, we have a drop to 20 percent and then in January it drops to 17.5 percent. So, what he was saying about the fall in taxes, they’ve already started implementing that process.
And you know: what a lot of these illegal operators don’t know is we do have a new Executive Order 13, which makes it illegal for these foreign operators to operate here in the Philippines. Some are big brands. And the government has now started to look at these brands. There is a Cyber Crimes Unit with the Philippine National Police. Within PAGCOR, they report these illegal sites. The NTC, National Telecommunications, has been directed to close down these sites.
It could even go to the extent in the future, if they don’t stop doing what they’re doing, that the enablers of the sites will get shut down as well. And they’ll get reported back to the enablers. Whether it’s social media companies, payment providers, media companies that promote them. So, I think everyone should be behind what PAGCOR’s trying to do here. The more we help them, the better industry we’re going to have here in the Philippines.
“It doesn’t need to be shut down, it needs to be let’s say ‘reinvented’.“Joe Pisano
There has been a big push on behalf of some members of the public and certain members of the House to completely shut down offshore gaming operators. What’s your viewpoint on that?
We’ve seen the recent reports over the past six months: the Senate and also some public figures wanting offshore gaming shut down. It doesn’t need to be shut down, it needs to be let’s say ‘reinvented’.
I think we, as a PIGO (Philippine Inland Gaming Operator) operator, have better processes in place to address the offshore market, as far as KYC, AML, responsible gaming, geofencing, fencing, legal sites, legal jurisdictions. Unfortunately, during the, I guess, the past administration, a lot of bad actors came into the industry, which tarnished that sector. It does bring in a lot of much-needed revenue into the Philippines. And we’ve got to remember: if you abolish legal gaming, all you’re producing is illegal gaming.
In regards to PIGOs, it’s interesting that you mentioned that and that’s obviously one of the reasons why I called you. There has been a very big growth in the number of PIGOs that have been licensed within the Philippines. Is that good? Is it better to have more competition?
As an operator, no. (Laughs)
We will end up with better products with more competition. We need to strive to improve our offerings. We don’t want to get to the point where the operators are just offering bonuses and people are playing bonuses and we’re not creating anything.
We’ve been fortunate enough to be the first ones to be allowed to run live horse racing. We’ve now contracted 37,000 races this year. We’re finalizing negotiations to bring in the Hong Kong Jockey Club, the Japan Racing Club. We already have Victorian racing out of Australia. We’re negotiating to bring in New South Wales racing, New Zealand and Hyderabad, out of India, now. And we will end up with 60,000 races per year. We really want to promote that sector. It is the sport of kings.
We can see, on the sports side, growth in things like the UFC, we see growth in tennis. NBA basketball is still the number one sport here. NBA basketball takes us from 8am till 11. We want to go around the clock with sports.
Is that one of the primary divisions where you think there’s going to be more growth this year? Or do you think that there’s going to be kind of a bit of a plateau in terms of it?
No, there are new products to come on the sports side. We still haven’t released eSports which is another popular sport here. It will drive basically the next generation of sports enthusiasts. And then on the eGames side, the RNG slot side, we’re gonna see a lot of new products there as well. I saw one company just now – Evoplay – announced 3d racing. Another product which is booming at the moment, and little known in other jurisdictions, is remote slots.
Now, these are live slot machines, they have a camera, they have an interface, which allows a player to play offshore. They’re primarily for offshore play. We are seeing a lot of growth in that sector. And it’s not only helping the online sector, but it’s also helping the land-based manufacturing sector because it’s one player, one machine. So, we could see as many as 20,000 machines in that sector this year, which is a bonus for manufacturers.
I want to talk about the Philippines. I did hear that you predicted the Philippines is going to be the largest growth market in Asia this year. What is contributing to that? Is it the new openings, Is it the shifts in market share, is it the new machines that are coming in? All of the above?
It’s confidence in the government. You know, we have a strong government at the moment, our economy here has been improving since the current government came to power. So, there’s confidence at that level. We are seeing the new PAGCOR, I call them the new PAGCOR, that has been tremendous with operators, allowing us to innovate, allowing us to come up with ideas and present it to them. And they have open minds to listen to those ideas.
We can see a passion now in the current management of PAGCOR. They want growth, they want to be the leading jurisdiction in Asia. There’s a lot of pride in what they do, and a lot of pride in the country. So, that flows through the whole industry here. And the remote slots is one example where they’ve allowed innovation. And now the Philippines is leading the way in that area. We will see some new land-based properties, some new integrated resorts coming on.
I think, towards the end of the first quarter, second quarter, we’ll see Solaire North open. And the area where they’re opening, in Quezon City has a tremendous demographic. We’ve heard of the Manny Villar property (in Las Piñas), just south, which is 81/87 hectares of land, with a golf course. And it’s probably going to be themed Olympus: Greek-themed. I’ve seen some sketches of that and it’s going to be a draw card for tourism for the Philippines. Over the past year, because you know we’re operating our sports book at NUSTAR, we’ve been seeing that property develop and grow.
The other property down that way in Mactan, Emerald (Bay), I think that they are now getting their financing in place, so we’ll see that opening. With these properties opening, we will see international tourism, because these are five-star properties that are opening, but we’ll see a lot more domestic tourism. And the government is also assisting with a lot of infrastructure projects: better roads, better bridges, airports.
But like you mentioned, the domestic market will continue to be the main market.
Yes, we’ve got 110 million people here. And a lot of young people. A lot of these other countries have an aging population, whereas we have a young population, and that’s going to drive the economy here in the Philippines.
I keep saying we have the best human resource and the best natural resource of anywhere in the region. And, we’re starting to see it flowing through now.
“On product offering, I think the Philippines is going to be not only a regional leader but a world leader as far as product.“Joe Pisano
Looking at Jade itself, what are your hopes for this year? Do you have any certain benchmarks that you want to achieve?
On the land-based side, we want to deliver 1,000 machines this year for our partners. On the sports betting side, there are new products we want to iFrame onto our sportsbook. There are also some new products that we want to present to the regulator, which is microbetting, probability gaming – or opinion betting. We are about to launch fantasy sports, fantasy basketball. We are also launching fantasy cricket, together with supreme TV in Sri Lanka. I believe Sri Lanka will be a big market in the future because like Macau, it sits next to a huge population. There’s a lot of similarities between Macau and Sri Lanka.
We see that as sort of the other most interesting market in Asia. But here in the Philippines and for Jade we may expand out to the eGames, slots, towards mid-year, I’d say. At the moment we’re focused on sports. We want to start offering sort-of a Jade sportsbook lounge, a branded lounge. We are looking at a Jade Sports online news sort of network, focused on popular sports here.
And then for this year it’s going to be education, actually educating players. Our sports books for a new jurisdiction, which the Philippines pretty much is, they’re too complicated. We offer 3,000 events a day and then we offer all the variances on those events, which are in the hundreds. So, we’re looking at iFraming simple bets that will educate the players over the top of our sportsbook. And that’ll keep us busy for this year.
Well, we’re going to be talking a lot more very soon. You have a long list of things to be doing in 2024, so I just wanted to thank you for your time. We’ve got Joe Pisano, CEO of Jade Entertainment and Gaming Technology. Thank you again.
Pleasure Kelsey, thank you and thank you to AGB.