PAGCOR Chief Says Casino Privatization And Bidding Process Could Start In 2025

Summary:

• Gaming operators are approaching PAGCOR regarding the planned sale of its casinos
• The agency is planning to sell its self-run casinos in bundles for PHP80 billion
• PAGCOR’s boss said the bidding process could start in 2025

After announcing plans to privatize its casinos back in March, the Philippine Amusement and Gaming Corporation (PAGCOR) chairman and CEO Alejandro Tengco said they were approached by several entities interested in the potential sale.

Numerous Entities Interested in Buying PAGCOR Casinos

In an interview with the media during the opening ceremony for Global Gaming Expo (G2E) Asia 2023 Special Edition: Singapore, Tengco said many have expressed interest in participating in the bidding process which could commence in the middle of 2025. At the moment though, PAGCOR is not yet ready to entertain offers.

PAGCOR is operating more than 40 casinos across the country under the Casino Filipino brand. The regulator is planning to sell them in bundles and Tengco is likely to stick to that plan to ensure fairness, as some venues are not doing as good as the others.

PAGCOR has long proposed the privatization of its casinos but the plan never pushed through under past administrations. Tengco is keen on completing the sell-off under his term which ends in 2028.

Asking Price Could be Too High

PAGCOR is aiming to raise an estimated PHP80 billion (US$1.47 billion) by letting go of its self-run casinos, but that price could be too high according to gaming analysts.

In a previous memo, analysts at Morgan Stanley stated that the asking price would imply 11x enterprise value to earnings before interest, taxation, depreciation, and amortization (EBITDA) ratio. Analysts predict that the buying interest could be low because of the steep price.

According to Finance Secretary Benjamin Diokno, proceeds of the sale could go towards the proposed sovereign wealth fund for the Philippines, known as the “Maharlika Investment Fund”.

So far, the operator of Newport World Resorts in Manila has been the first to publicly express interest in buying PAGCOR’s casinos, via the integrated resort’s chief operating officer, Hakan Dagtas.

Earlier this month, Dagtas stated that they are still awaiting the full details of the sale, but they would be interested in acquiring some of the properties. Newport World Resorts is operated by Travellers International Hotel Group Inc., which was previously cited by analysts as among the potential buyers of PAGCOR’s casinos. The company is a subsidiary of the Philippine conglomerate Alliance Global Group Inc.