By Luisa Maria Jacinta C. Jocson, Reporter
THE DEPARTMENT of Finance (DoF) is ready to privatize the Philippine Amusement and Gaming Corp.’s (PAGCOR) gaming operations once the agency finalizes its shift to become a purely regulatory body.
“We are waiting for PAGCOR’s cue. Chairman (Alejandro H. Tengco) asked for time to organize the transition and increase cash flows to the casinos for higher value sales,” Finance Undersecretary Catherine L. Fong told BusinessWorld in a text message.
“Once PAGCOR is ready, we can acquire independent appraisals to set a base price for auction,” she added.
Ms. Fong noted that the timetable for divesting PAGCOR’s assets by 2025 is “very feasible.”
Last week, PAGCOR announced its plan to let go of its operator role to fully become a regulatory body. It is beginning preparations for the transition, which will likely be completed by 2025.
Mr. Tengco earlier said that the move will “level the playing field and ensure future growth and viability for all gaming industry players.”
The DoF as well as some lawmakers have been pushing to relieve PAGCOR of its role as a casino operator and commit to being a regulator.
Antonio A. Ligon, a law and business professor at De La Salle University, said that this decision is a “welcome development.”
“Drawing of lines as to the responsibilities will be relevant and necessary to avoid conflict of interest,” he said in a Viber message.
Ateneo de Manila University economics professor Leonardo A. Lanzona said that PAGCOR’s dual role as operator and regulator had “created conditions more favorable to their operations at the expense of the other firms.”
“As a result, PAGCOR ends up mainly as a monopoly, thus raising the prices for the patrons of these services and resulting in lower revenues for the government,” he said in an e-mail.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message that PAGCOR’s commitment to being a regulator will help create a “better and more accessible gaming landscape for everyone.”
PAGCOR regulates and issues licenses to all gaming operations within the Philippines. This includes land-based casinos, bingo, electronic bingo, e-Casino games, sports betting, specialty games and e-Billiards.
It currently operates 42 Casino Filipino branches and satellite operation groups nationwide.
Mr. Tengco earlier noted that PAGCOR’s estimated sales from gaming venues could yield between P60 billion and P80 billion.
To ensure a successful transition, Mr. Ligon said that PAGCOR must focus on delineating functions.
“Crucial in the transition will be the personnel and the necessary system operations. It will be a good opportunity to come up with streamlined operation structures, together with a corrupt-free mechanism,” he said.
He also noted that the DoF should be transparent in setting guidelines and procedures in screening private operators.
Mr. Lanzona said this shift will also be an opportunity to revisit the country’s gaming laws.
“(The government) also needs to highlight the taxes and other services that new gambling facilities will need to pay society. Limitations on certain socially unacceptable side products of these firms should also be set. Otherwise, social damages or unethical activities may prosper as the market becomes more competitive,” he added.
Senator Ana Theresia “Risa” N. Hontiveros-Baraquel also said that PAGCOR must work on strengthening its regulatory powers.
“PAGCOR needs a plan on how it will help tax the operators, ensure compliance with laws against money laundering, conduct due diligence, and exercise vigilance to avoid working with and giving licenses to bad elements,” she said in a Viber message.
“It’s harder to do this when the government loses access to the goings-on inside gaming establishments. PAGCOR needs to identify the new legal, personnel, and technological capabilities it needs to have,” she added.
Mr. Limlingan said that PAGCOR should also be vocal on the changes happening in the gaming environment.
“Concerning privatization strategy, it is always recommended to be mindful of all shareholders and ensure that there will be a smooth transition in the privatization process,” he added.