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PAGCOR privatizes, expects to attract $1.1 billion to Philippines; faces cancellation of PGO licenses

The privatization of the state-owned casino chain, proposed by Pagco’s chairman and CEO Alejandro Tengco and approved by Philippine President Ferdinand Marcos Jr., is expected to increase from $60 billion ($1.06 billion) to $80 billion ($1.41 billion) in the Philippines. According to reports, Tengco offered a price point in the House of Representatives on Aug. 14. He also reportedly announced that a special audit committee would audit Philippine Marine Game Operator (POGO) to prevent casino revenue leaks.

Proposed privatization:

On Aug. 14, CNN reported that the Philippine amusement game company (Pagcor) will privatize 45 casinos by the third quarter of 2025. Supporters of the House of Representatives argued that overseas operators generate higher revenue levels than casinos run by Pagcor, while opponents claimed that privatization would mean the sale of “golden egg-laying geese.” Nevertheless, Tengco announced upgrades to more than 3,000 electronic game consoles to make the most of the upcoming privatization.

As GGRAsia reported, Tengco told the House of Commons, “The privatization of Pagcor’s 45 properties will take place as early as the third quarter of 2025.” He added that privatization will solve Pagcor’s dual role situation. “Pagcor should be purely a regulator. We are the only ones in the world to act as regulators and operators. It is inappropriate and unethical because we give licenses but also operate,” Tengco reported.

Estimated selling price:

The Pagcor leader reportedly referred to the range of selling prices as a “minimal estimate” that is expected to increase in the respective bidding processes. According to GGRAsia, the selling price of the Pagcor Casino Philippine properties has been proposed by the Philippine Treasury in the range of between 200 billion and 250 billion.

But Tengo reportedly told a House committee hearing that such estimates also include real estate that is no longer attributable to Pagco. In addition, Representative Joey Salceda was quoted as suggesting during the hearing that the privatization process could generate up to $120 billion ($2.11 billion) to $128 billion ($2.25 billion) in revenue for the country.

Sell-Off Prize 범위:

The same source reported that privatization is expected to generate between $60 billion ($1.06 billion) and $80 billion ($1.41 billion) in revenue in the Philippines. While some analysts are reportedly reluctant to approve estimates, even taking into account an ambitious PHP of $80 billion, the privately held casino division in the Philippines has expressed a willingness to participate in the process, as GGRAsia reported.

To that end, Pagcor will upgrade about 3,000 electronic game consoles. “The goal is to increase the value of what we’re going to privatize,” Tengco reportedly told the House of Representatives.

Profit allocation:

The venue Pagcor operates reportedly had total gaming revenue of 15.79 billion PHP ($280 million) in 2022, while its mass market slot machines amounted to 8.47 billion PHP ($150 million), according to a report from Asian Gaming Brief. CEO Pagcor also said the Treasury Department is involved in considering the organization’s future ownership structure, according to a report. The current state of government-owned and controlled companies stipulates that they pay about 50% of their profits to the treasury.

The audit determines the status of the POGO:

According to Asian Gaming Brief, Pagcor’s CEO and chairman, Alejandro Tengco, announced during a hearing at the Philippine House of Representatives on Aug. 14 that a special team from the Philippines Audit Committee (COA) will act as the PGO’s auditor, as Pagcor will have to appoint a new third-party auditor. The move is reportedly due to the loss of PHP 2.2 billion ($38.68 million) in tax revenue for the single PGO, which operated for only eight months.

When asked if all POGOs should be closed, the agency head reportedly noted that these operators are currently in probationary condition and will reapply for their licenses by Sept. 15 to avoid revocation. “This is a one-strike policy, and if they continue to engage in illegal activities such as credit card fraud, crypto investment fraud, and love match fraud, I would recommend shutting down the industry,” Tengo reportedly noted

BY: 파친코

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