November 18, 2014

Pagcor to assess Entertainment City before granting Caesar’s casino license bid

BusinessWorld today quoted a statement of the Philippine Amusement and Gaming Corp which indicated the regulator’s preference to assess and review the Entertainment City’s absorptive capacity before considering a possible fifth licensee.

The statement was in reaction to reported bid by Caesars Entertainment Corp for a license to put up a casino facility near the Ninoy Aquino International Airport within five years. The news report also quoted an official of Caesars as saying the company’s ongoing negotiations with creditors for a pre-arranged bankruptcy will not affect its capability to finance the plan to invest in the Philippines.

Our take: Pagcor’s move to hold any grant of new licenses until the four private casino entities would have substantially completed the construction of their facilities in the Entertainment City should provide significant headway to the early locators. This should enable them to ramp up operations and withstand competition from any new player.

In the meantime, we remain positive on the prospects for the Philippine gaming sector. We havea BUY rating on Bloomberry Resorts Corp (BLOOM), Melco Crown Phils Resorts (MCP), Premium Leisure Corp (PLC) and Leisure and Resorts World Corp (LR) while we rate Travellers International Hotels Group Inc (RWM) a HOLD. – WealthSec