PAGCOR's Privatization Plan: Transforming the Philippines Casino Scene

Reshaping Asia's Gaming Landscape

The Philippines is currently one of Asia’s fastest-growing gaming markets, closely trailing Macau and fiercely competing with Singapore. To ensure long-term viability and fairness, the Philippine Amusement and Gaming Corp (PAGCOR) is advancing a long-awaited plan to shed its commercial operations.

Currently, PAGCOR operates with a massive conflict of interest: it acts as both the regulator of the country's $7 billion gambling sector and an active commercial operator of the 43 Casino Filipino venues. PAGCOR Chairman and CEO Alejandro Tengco, who is pushing to unload the casinos by 2028, summarized the issue bluntly: "A referee cannot also be a player on the same field."

The proposed privatization has drawn the attention of Manila’s mega-resort operators. The Casino Filipino chain is highly lucrative, generating over 10 billion pesos annually, largely driven by mid-tier table and slot play from local patrons. Kevin Andrew Tan, CEO of Alliance Global Group (owner of Newport World Resorts), has already signaled strong interest in acquiring select venues to expand their footprint beyond Manila, noting that the privatization will promote much-needed fairness among industry players.

Valuation Conundrum and Market Realities

While the privatization offers massive expansion opportunities for private casino operators, the transition comes at a challenging time. Brick-and-mortar casinos are facing margin pressures from intensifying competition, shifting digital trends, and macroeconomic headwinds. Reflecting these challenges, PAGCOR’s gaming revenues tumbled 27% year-on-year in the first half of 2026.

Consequently, the estimated value of the Casino Filipino chain has taken a significant hit. Initially projected to fetch up to 80 billion pesos, the expected windfall has dropped to between 30 and 50 billion pesos (roughly $813 million).

The core issue driving this markdown is real estate. PAGCOR does not own the casino properties; it merely leases the casino floors. As Tengco pointed out, potential acquirers are not buying prime real estate; they are purchasing the gambling licenses and future revenues.

Navigating Structural and Political Friction

Because the operators are buying leases rather than owned property, the transaction process is fraught with friction. Casino Filipino cannot be sold through a simple stock acquisition. It requires site-by-site asset sales and individual lease assignments. This structural reality gives landlords immense leverage to demand rent hikes or delay deals before transferring the leases to new private operators.

Furthermore, private operators looking to bid on these casinos must factor in labor complexities. Buyers may face pressure to absorb up to 70% of the current casino staff or finance hefty severance payouts, creating resistance from institutional operators who prefer leaner, more flexible staffing models.

The Debate Over State Revenues

Beyond the operational complexities for future buyers, the privatization faces stiff political resistance from within the government. Lawmakers oppose selling highly profitable venues that currently fund public programs, arguing it makes little sense to "sell the goose that lays the golden eggs."

A major sticking point is the gambling sector's contribution to state healthcare. Currently, half of the government’s share of PAGCOR gaming revenue goes to PhilHealth. Replacing direct casino earnings with smaller regulatory license fees will create a massive funding shortfall. Analysts estimate that private operators acquiring these locations would need to triple their gross gaming revenues just to break even for the state’s medical coffers.