The Philippine Amusement and Gaming Corporation (PAGCOR) has revealed its ambitious plan to privatize casinos, by the third quarter of 2025. PAGCOR’s Chairperson, Alejandro Tengco, made this announcement during the national budget deliberations, emphasizing the goal to enhance the value of these privatized entities. While this move signals a shift in PAGCOR’s operational strategy, it also raises questions about the impact on the betting industry and the nation’s revenue stream.
Tengco’s proposal comes in response to the ongoing debate over PAGCOR’s dual roles as both a regulator and an operator. The complexity of this arrangement has been a point of contention, with concerns raised about potential conflicts of interest. Parañaque’s 1st District Representative, Edwin Olivarez, pointed out the agency’s report indicating that offshore operators generate higher revenues compared to PAGCOR-operated casinos. This observation has led to speculation that privatizing certain PAGCOR assets could potentially improve efficiency and profitability.
I could see a shortfall in the revenue from casinos.
On the other side of the spectrum, Cagayan de Oro Representative Rufus Rodriguez expressed reservations about the necessity of privatization. Rodriguez questioned the rationale behind selling profitable assets, particularly when PAGCOR predicts increasing returns from these casinos in the coming years. He argued that the move could disrupt the consistent income flow these casinos contribute to the national revenue.
PAGCOR’s Vice President, Sharon Quintanilla, provided a glimpse into the agency’s financial performance during the initial stages of deliberations. The organization reported a total revenue of $1 billion in 2022. PAGCOR’s projections indicate a steady rise, with anticipated income reaching $1.33 billion by the end of 2023 and a further increase to $1.41 billion in 2024.
Regulations are not welcomed by casinos
Chief Tengco’s assertion that PAGCOR aims to refocus on its core regulatory role aligns with industry trends. Regulators worldwide are grappling with balancing overseeing and participating in the betting landscape. By divesting its casinos, PAGCOR aims to streamline its operations and channel its efforts into efficient regulation. Tengco emphasized that “PAGCOR should purely be a regulator and not an operator at the same time.”
While this move appears to align with a more transparent and accountable regulatory environment, its implications for the industry remain debatable. For PAGCOR, the challenge lies in ensuring a smooth transition while safeguarding the interests of operators, players, and the government.
For bookies, the evolution of PAGCOR’s approach holds significance.
As the global betting market continues to expand, regulatory shifts in influential jurisdictions can have ripple effects. The Philippines’ transition to a more streamlined regulatory role is poised to create a more attractive environment for betting operators seeking clear and consistent oversight. Bookies should vigilantly monitor how these changes unfold, as they might find opportunities to navigate new regulations, establish operations in a fresh jurisdiction, or optimize their existing setups.
As the Philippines strives to strike the right balance between regulation and operational autonomy, the betting industry watches keenly. The move to privatize casinos could mark a turning point in the nation’s gambling landscape, potentially shaping the future of the industry and attracting both operators and players alike.