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Entertainment City’s four top guns olaire Resort and Casino is the first of four casino resorts due to open in the new Entertainment City on Manila Bay. The cluster, on 120 hectares of reclaimed land, is meant to emulate the success of Macau’s Cotai Strip. Each resort has a minimum price tag of US$1 billion (about MOP8 billion), a gaming licence and at least one Filipino billionaire to back it. Ports tycoon Enrique Razon is the principal Filipino investor in Solaire’s parent company, Bloomberry Resorts Corp. Mr Razon’s fortune grew from US$1.6 billion to US$3.6 billion, enough to put him in third place on Forbes magazine’s list of the richest Filipinos, owing to the listing of Bloomberry Resorts Corp on the Philippine Stock Exchange last year. The Belle Grande, due to open next year, is backed by the richest man in the Philippines, Henry Sy, and his retailing and property empire. Melco Crown Entertainment Ltd is a partner and will operate the casino resort, which is expected to have three luxury hotels and a shopping mall, along with a casino on two floors. Universal Entertainment Corp’s Kazuo Okada of Japan recently roped fellow-billionaire John Gokongwei into his US$2.3 billion project to build a casino resort. Mr Gokongwei is the fourth-richest Filipino. He controls the second-biggest operator of shopping malls in the Philippines. Their casino resort is due to open next year. But its future is uncertain because of allegations that Mr Okada offered cash and gifts to executives of the Philippine gaming regulator to ensure a foothold at Entertainment City. Macau’s Galaxy Entertainment Group Ltd is reportedly among the casino operators circling the project if Mr Okada is forced out. Resorts World Manila opened in 2009 next to Manila airport. Its success shows there is demand for superior gaming facilities. Its backers, a partnership of Filipino billionaire Andrew Tan’s Alliance Global Group Inc and Genting Hong Kong Ltd,
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Macau-style strategies to emerge, particularly in the VIP segment.” That is quite probable, as Solaire’s management includes veterans from Macau with experience in opening and running notable casino resorts here. Mr Andreaci was senior vice-president for gaming operations of Galaxy Entertainment Group Ltd’s Galaxy Macau, and formerly an executive of Las Vegas Sands Corp. Solaire’s chief operating officer, Michael French, was a senior vice-president of Melco Crown Entertainment Ltd’s City of Dreams and Altira. The new casino resort’s senior vice-president and chief financial officer, Ed Chen, is a former financial controller of Wynn Macau Ltd. Some 400 of Solaire’s gaming personnel have experience in Macau or Singapore casino resorts, many of them Filipinos that the resort has lured home.
Second home Global Gaming Asset Management LLC has the contract to manage Solaire. The company’s principals include William Weidner, who opened both the Sands Macao and the Venetian Macao before leaving Las Vegas Sands in 2009 after
whose parent Genting Group owns Singapore’s Resorts World Sentosa, now plan to open Resorts World Bayshore in Entertainment City in 2016. The casino resort will have a shopping mall and a 3,000-seat opera house along with its casino and hotels. Testing the market Some question whether the Philippine gaming market, projected to generate US$2 billion in revenue this year, can support four casino resorts together containing 1,000 gaming tables, 5,000 slot machines and 3,000 hotel rooms. “I don’t see why not,” says Leonardo Dioko, a professor at the Institute for Tourism Studies in Macau. “The economy is booming. Middle-class income appears to be sustainably rising, the current government has rationalised most of its policies and the leadership enjoys stability and support.” CLSA Asia-Pacific Markets gaming analyst Richard Huang agrees. “We believe the integrated resorts will be successful due to the strong local gaming demand,” he says. “Investors should also enjoy attractive investment returns with the low operating costs – gaming tax and staff costs are much lower in the Philippines than Macau – and the lower construction costs. Philippine casinos only cost US$1 billion to build versus US$2 billion to US$4 billion in Macau.” Galaviz & Co managing director Jonathan Galaviz says all modelling and projections point to Manila being able to sustain several billion-dollar casino resorts. IGamiX Management & Consulting managing partner Ben Lee is more cautious, pointing to the part played by President Benigno Aquino’s government. “It all depends on whether the current economic momentum generated by the Aquino administration can be maintained past his term, which will expire in three years,” he says. “A big risk is who will be the next president,” HSBC bank regional gaming analyst Sean Monaghan says. But he adds: “Sometimes you need to build it to test the market.” MARCH 2013