Privatizing casinos poses dilemma
PRIVATIZING the operations of state-owned casinos will reduce the government’s income sourced from the gambling industry and can be seen as “counterproductive” for the Philippine Amusement and Gaming Corporation (PAGCOR), according a congressman who has been pushing for a separate regulatory gaming commission.
Selling off state-run casino franchises owned by PAGCOR would be counterproductive as it contributes more than 50% of its revenues to government’s coffers, Cagayan de Oro Rep. Rufus B. Rodriguez told BusinessWorld in a Viber message.
However, PAGCOR is hard-pressed to sell off its casino franchises because of stiff competition with privately-owned casinos.
“Casino Filipino branches can’t compete head-on with casinos in integrated resorts,” PAGCOR Assistant Vice President for External Communications Catalino B. Alano, Jr. told BusinessWorld through Viber.
PAGCOR is seeking to transition to become a gambling regulatory body should it successfully privatize its casinos. “PAGCOR wants to become a pure regulator,” Mr. Alano said.
The state’s gambling and gaming regulatory agency is looking to completely privatize its state-run casinos by 2028 as its role as operator and regulator of the gaming industry conflicts with its mandate.
“The fact that PAGCOR is an operator and at the same time regulator of casinos… and other betting activities is irregular and considered by some as anomalous,” Mr. Rodriguez said.
Noting PAGCOR’s conflict of interest, Mr. Rodriguez filed House Bill (HB) No. 10171 to create a separate regulatory gaming commission, a move seen to boost the competitiveness of the country’s gaming industry.
“The gaming industry will be better off as there will be no more conflict of interest with PAGCOR,” he said. “Having an independent, administrative regulatory body… that will exercise supervision and control over all casinos… allows for more effective government… and monitoring of gaming operators.”
Commenting on HB No. 10171, Mr. Alano said: “We need to see first how the bill intends to separate the regulatory and operations aspects.”
Making PAGCOR abide under the current terms of its nation-building initiatives would make state-run casinos unprofitable, he said.
The state gaming regulator allocates a part of its budget to nation-building programs such as funding Philhealth and the Philippine Sports Commission, reparations to Filipinos wrongly convicted of crimes, and disaster relief operations, he added.
“The mandated contributions to nation-building also hurt Casino Filipino’s bottom line,” he said. “It is not right for PAGCOR to subsidize casino operations using earnings from other segments like licenses and fees, electronic games.”
PAGCOR Chairman Alejandro H. Tengco said in a planning conference last year that it allotted P56.2 billion for nation-building initiatives in 2024. — Kenneth Christiane L. Basilio
