PH bets on high-end casinos to become top gaming hub

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casino
The coming of world-class gaming facilities sets  the stage for fierce marketing battles for customers

And so the game begins.

With the opening of the country’s first high-end casino-resort last March, the Philippines is set to be one of the top gaming hubs in Asia. The billion-dollar industry is expected to contribute largely in attracting 10 million tourists a year by 2016, double the
projected inbound visitors for 2013.

One-tenth of these tourists are expected to be lured by the Entertainment City, a gaming and entertainment complex currently under construction on a 100-hectare reclaimed portion of the Manila Bay. With four more world-class casinos expected to be put up in the near future, it will be like the Strip of Las Vegas and is seen as the rival of neighboring Macau.

Among these are: the recently opened Solaire Resort and Casino by Bloomberry Resorts and Hotels headed by port magnate Enrique Razon Jr.; the Belle Grande Manila Bay by the SM Investment Corporation; Resorts World Bayshore by Genting Hong Kong; and Manila Bay Resorts by Universal Entertainment Corporation, owned by Japanese tycoon Kazuo Okada.

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Solaire was opened to much fanfare in March of this year, and the three casinos that will follow are expected to give it a run for its money.

The $15 billion-worth gaming and leisure hub is expected to be in full operation by 2016 but the competition among existing casinos in the country has already started to get tougher and more exciting.

The top two gaming corporations— Solaire and Resorts World—have started to boost the gaming and entertainment industries in the country. With its exciting games and machines, plus their classy ambiance, foreigners and locals alike have flocked to these establishments to experience the Las Vegas-type of night life right here in the Philippines.

Not only that—even events and concerts are held at these prime locations. From plays to operas to concerts, these casino-resorts are also known to stage performances that could only be seen overseas a few years ago. Solaire and Resorts World have become go-to destinations not only for gambling, but also for general recreation.

Good sign
The fairly new industry of casino-resorts has slowly penetrated the Phil­ippine market, especially among the middle class and above. Vicente Reyes, president of the Philippine Marketing Association, attributes this mainly to the increasing quality of lifestyle among
Filipinos as they have more money to spend for leisure and gambling.

“It’s actually mirroring the good economic performance of the country,” he told The Manila Times. “Actually the initial sprouting of the big ticket casinos are somewhat indicative of we have a viable economy now. Now we can now afford to go to the casinos… The lifestyle is getting more sophisticated, I would say.”

Reyes also noted that there are a number of reasons why people go to newer and bigger casinos—it’s not just because they want to win money, but because of other factors like the ambiance and the overall atmosphere of the place.

“People flock to casinos now because of the ambiance, the feel, there is this aspirational factor. Like if you go dream big, you might as well dream big,” he said. “It’s like a moth driven to bright light.”

For example, Adrian Relato, 22, goes to casinos not only to win but to enjoy. Though an occasional player, he still allots some of his money to play games.

“Of course the main reason why I go there is to win,” he said. “Even though we know that no one wins in the casino, I still do it because it feels good to bet in the games.”

The sophisticated and more exciting games also lure people to go to casinos. Technology has greatly helped in advancing the features and kinds of games, particularly the slot machines.

Add to that the free food and beverage that add to a casino’s appeal. Some casinos—particularly the bigger ones—often serve free snacks to customers, even to non-gamers, to lure them to start playing or to keep betting. Some serve free refreshments, like sandwiches and pastas, including juices and beers.

The security of the place is also a factor in attracting customers.

Tracy Nicomedes, 25, prefers the bigger and newer casinos than the older and smaller ones because of the total feeling of safety once he wins—he need not think about the possibility of being mugged once he steps out of the casino.

“The people [in these casinos]are much more sensible and the place is much safer,” he said. “When you win, it’s not troubling when you go out of the area unlike in low-class casinos.”

Entertainment is an element, too, as not all who frequent casinos go there to gamble.

Every night, there are shows and there are even performances in the gaming area itself to entertain habitues who just want to dine or stroll inside the establishment.

“We are getting more exposed to things we were never aware before,” Reyes said.

“Entertainment is more elaborate and more hyped productions… they feature singers. And these are not just singers, these are singers who already have names.”

In fact, the perception towards casinos in the dominantly Roman Catholic nation is slowly changing. Casinos are now more associated with leisure and first-class entertainment than with the “evils” and dangers of gambling.

If not the arts, the establishments are also linked to lifestyle and the good life, as an institution that is regarded as a “part of the community,” not just a place for gaming and gambling.

A high-end casino “is not a center, it’s not an establishment, but it’s really a part of the community,” Reyes said.

Still lacking?
The Philippines is seen as the future gaming center of the region, not just by casino tycoons, but also by financial institutions like Standard & Poor and Credit Suisse. The latter projected that the country can beat Singapore’s $5.6-billion gaming market revenue by 2018.

Lawrence Ho, CEO of Macau’s Melco Crown Entertainment Ltd., said that the country has a big potential especially with the opening of the Entertainment City.

“If you extrapolate that farther down the road, the Philippines, in five to six years could be the size of Las Vegas or Singapore which is about $6 billion [in gaming revenues],” Ho said when he arrived in the country last March.

The gaming industry definitely has the promise of earning huge revenues.

Solaire, for example, posted P578 million revenues in its first 15 days of its operations, and a huge chunk of this—or P495.6 million—came from gaming, according to data disclosed by Bloomberry.

However, despite the positive reception of the institutions and the general public to these gaming centers, the country still has a long way to go in terms of marketing and institutionalizing the modern leisure and gaming industry.

Reyes sees that efforts are still lacking to create the necessary infrastructure especially if the government plans to be at par with other countries like Singapore and China’s Macau.

“We lack in advertising, we lack in communication, we lack the consciousness to promote,” he said, referring to the lack of direct support given by the government to the industry. For example, in Macau, the government has its own shuttle services to entice tourists to play in casinos, apart from the shuttle services by the casinos themselves.

“For example, the government and the gaming centers… dun pa lang, they lack communication between the departments,” he added. “So I think there should be cooperation between the Department of Tourism, the airport authorities, the private enterprises… the gaming centers. There should a holistic effort.”

Sustainability
Reyes also pointed out that for the casino-resorts to become viable and sustainable, the government should play an active role to promote and market the business since it generates revenues and employment.

The state should be the one which should tie the ends to meet the market’s demand, or else, it can lead to a failure like the failed casinos at the Subic Freeport Zone.

On the other hand, he also warns that the longstanding issue of corruption and mishandled crises can also hinder and impede the growth of the emerging gaming industry.

“I think if our aim is to become the [casino-resorts] hub in the region, this is very viable,” Reyes said. “Andun na yung we communicate better, our English is better, we’re very hospitable people… it’s there already. I think the only detriment to it is the mother of all evil, corruption.”

Apparently, corruption is one of the main worries of U.S. casino operators and the cause of the rift between casino magnates Steve Wynn of Wynn Resorts and Okada. Okada, according to an investigation by former Federal Bureau of Investigation chief Louis Freeh, allegedly violated U.S. anti-bribery laws after sponsoring the trip of Philippine Amusement and Gaming Corp. (Pagcor) chief Efraim Genuino and his family to the Beijing Olympics in 2008.

“It has great potential but if you are mired with political issues,
like the hostage scenario in 2010, the more recent Taiwan case, if you don’t get to overcome the image outside, then you’ll fail in attracting them [tourists and investors].”

Meanwhile, the casinos that have been sprouting all over the country, especially in Metro Manila, are waging a fierce battle to win the hearts and minds of customers.

Like any business, casino-resorts exist to generate profits, and putting up a high-end facility can only be considered a big gamble. But with the right mix of a right product catering to the right market (high-end gamblers) and a little bit of luck, the profits can be enormous.

Unfortunately for them, there is no sure-fire formula for success. Even Las Vegas has had to switch marketing strategies over the years. About a decade ago, the gambling capital of the world tried to bill itself as a family destination.

More recently, the catchphrase for the city in the US state of Nevada has been, “what happens in Vegas, stays in Vegas.”

How the Philippines’ own Entertainment City will try to win the battle to become Asia’s top gaming hub should be an interesting marketing case study.

Will the odds be for or against the Philippines? Let the game begin.

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7 Comments

  1. Steve Racilis on

    Poker players usually consider playing at Casinos where there is ‘reasonable bad bet’ such as As full with 2 – 10 losing a pot should be the measure for a bad bet & of course 2 cards must play. “Comp time for food will make sure players who are on their way out may order food in Casino restaurants. Tournaments will bring in players who want to wear the top 1 bracelets or have the bragging rights. Entertainments will give players the chance relax & get their 2nd wind. Security (live) must always be visible at the parking lots & near doors. Courtesy is a must among employees & players. Clean CRs is a must.Dealers must run the tables accordingly.

  2. Eddie Magnificently on

    NAIA is an DISGRACE to the Philippines. Big time spenders will just turn around and fly out after landing there. It’s dirty, disorganized, overcrowded, and immigration is understaffed. Plus the ground transportation confusion and ripoffs after exiting Customs/Immigration are not the kind of welcome sophisticated traverlers expect or tolerate. I hate to say it, but NAIA is a third-world airport that is getting even worse. Clark is jus TOO FAR AWAY to be a viable alternative. The solution to the airport/ground transport problems is for the government to match it’s words with actions, not just more words.

  3. benjamin brilliantes on

    sana may ibigay na comps ang casino like here in u.s. katulad ng free rooms, free play money, gifts, at raffles at libreng food at shows…na kahit talo sa slots panalo naman sa comps. minsan pa free gas katulad sa harrah san diego..at dapat ang mga manager ng slot ay nasa casino floor at wala sa office

  4. ED VALENCIANO on

    THE WRITER SHOULD BE MORE CURRENT WITH HER facts. Recently, it was announced that the Robinson-Okuda group might not push through with their project; however, they might have “reconciled”, who knows.

  5. domingo ligot on

    I think it will help much if the international airport is closer to the casinos so instead of transferring to clark in pampanga why not locate the airport in sangley cavite which is just a short distance to the reclamation area. A direct route can be constructed on reclaimed land much like the manila cavite toll highway.

    • Reynaldo De Guzman on

      A bridge from Manila as a direct route to airport at Sangley Point reclaimed area will be a good idea. Watching the beautiful sunset at Manila bay from this bridge should be an added attraction too.

  6. The promotion of the gaming industry in the Philippines will bring in billions of dollars from tourist and local gamers. It will also bring social problems that needs to be mitigated by the government.

    The government needs to establish a program that deals with gambling problems and those people who will be addicted to gambling. The current experience in the United States and those States in the Union that legalized gambling, they all were required to establish problem gambling programs to address gambling addiction of their residents. Based on the current experience in California, 10 per cent of the population are high risk for gambling addiction.

    The Philippines will also have its own gambling addiction problem with this new casinos and gaming institutions. People with gambling addiction in some cases are also having mental health issues. It is high time for the government to start developing programs that will address gambling addiction and mental health issues as a consequence of the establishment of a gambling industry in the country.