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Strong growth projected as pandemic eases


The Philippines is expected to be one of the best-performing jurisdictions in Asia, with GCG Gaming Advisory Services’ Executive Director Scott Feeney projecting a $10 billion market within five years.

For 2021 we are estimating that gross gambling revenue (GGR) will close out at US$2.4 billion. For 2022 we are estimating the GGR to be in the US$3.6 to US$4.4 billion range, with strong growth in eSabong and in particular in Clark with the opening of HANN casino in December and ROYCE in June.

The opening of NuStar in Cebu in 2Q22 will add vital GGR to the overall Philippines figures. We project the Philippines to grow steadily to a $10 billion market by 2026-2027.

The Philippines’ primary advantage is that locals can enter the casinos. This advantage has clearly benefited the Philippines over other countries, including South Korea, Vietnam and Cambodia that have relied on foreign visitation during this last 20 months.

The Philippines has a robust and growing middle class and with few alternatives, the integrated resorts are seen as the best high-end option for dining, entertainment, events, shows and gambling. Gaming was established well before the integrated resorts in Manila opened up from 2009 (RWM) and as such the local customer base is very well established and there are ample mature mid to high-end customers.

Foreigners based in Manila and Clark are a major contributing factor to the casinos doing relatively well during this pandemic. The government has done a reasonable job controlling the virus within the gaming industry, whilst allowing the casinos some level of operations for the most part.

We have been recommending the Philippines as the best location to invest for at least the last decade and we have also been advising clients for several years, well before the pandemic, to work their business cases on no junket activity. Fortunately the casinos have a strong business case without the junket revenue.

3Q21 results for Entertainment City surprised on the upside with a 32 percent increase in GGR compared to 2Q21. With a large part of the quarter seeing casinos closed, either fully or partially, it shows strong evidence that the high-level ‘invited’ premium guests are very much cashed up and willing to gamble when the opportunity arises.

Clark was fairly flat 3Q21 over 2Q21, with a GGR of US$46 million, but this was still higher than 2Q19 2019, revealing tremendous underlying growth, and we are forecasting that Clark will exceed its 2019 GGR in 2022, even with international borders to remain mostly heavily restricted in the first half.

Another major advantage of the Philippines is that the three major casino locations have a completely different offering. Clark, with its brand new airport, offers golf courses, mountains and scenery and is also within 45 minutes of Subic Bay. Cebu, also with its new airport, offers its beaches and smaller idyllic islands, and of course Entertainment City is in the city area and now connected to the international airport, with an offering mostly on par with Macau.

Next year we will see the drive from Manila to Clark reduced to an acceptable one hour on the new tollway, giving international visitors a far greater opportunity to visit Manila and Clark over one trip. There are many key drivers to each of these three locations that will entice visitation both domestically and internationally.

The new NUSTAR and Emerald resorts will be world-class destinations, but will take some time to establish themselves. We estimate US$100 million GGR in the first full year of operations of both casinos, which should be 2024.

The casinos in the Philippines derive approximately 35 percent of their GGR from EGM’s, which is another positive and levels out the risk of relying on table games and inherent risk with the premium business when factoring in the likelihood that the casinos are offering direct credit.

There is little reliance on the low-return junket markets. The growth of GGR is more directed at premium play foreigner markets such as the Koreans and Chinese living in the Philippines, with foreign visitation from abroad not being a huge priority and effectively just another revenue stream over and above what is derived from its internal markets.

For online betting (PIGO), the larger operators (COD, Solaire, RWM, Okada) will initially take some time to fully embrace this. Similar to sports betting, it is something that takes some time to conduct correctly and within the regulations. History would remind us that the regulations do get changed often and that will see a very cautious approach.

Case in point are the various rules and taxes applied to the POGO online studios, which have been causing concern to those operators for the last 4-5 years. Of course the large operators will take it slowly and see what transpires this coming year. The PIGOs, as they are named, are strictly for casinos and their local customers.

I am not sure that this can be truly controlled by the regulator and may be a case of self-regulation, which would be expected of those operators in any case. Online puts the operators in a difficult situation if players from, for example China, work their way into that system. The casino’s licensees would depend upon this not occurring and it is a further reason to proceed with the greatest caution.


Scott Feeney
Scott Feeney
Scott Feeney is Director at GCG Gaming Advisory Services. Over 27 years experience in SE Asia working for various casinos in the region from 1994 to 1998 and since that time has been involved at an executive level in several SE Asian based gaming businesses including Professional Casino Management, PCM Group, Phoenix Gaming and Gaming Concepts.