In a Tuesday note delving into Philippines industry-wide gross gaming revenues in 1Q23, Maybank analyst Miguel Sevidal observed a significant increase in the market share of the nation’s licensed casinos, with Manila’s Entertainment City seeing share rise from 70% five years ago (1Q18) to 80% in 1Q23, while Clark has risen from 5% to 12% over the same period.

By comparison, market share held by PAGCOR casinos has fallen from 24% in 1Q18 to 8% in 1Q23.

“This suggests some movement by domestic players from PAGCOR’s Casino Filipino outlets to the integrated resorts, and is consistent with our observation of Entertainment City’s increasing wallet share in recreation and entertainment spending by locals,” Sevidal said.

This combination of decreasing market share and below-average industry growth “make PAGCOR’s Php80 billion (US$1.44 billion) valuation expensive,” he added. “These trends were seen again in 1Q23.”

As reported by Inside Asian Gaming, PAGCOR Chairman and CEO Alejandro Tengco has made the privatization of PAGCOR casinos a priority of his term in office, allowing the agency to fully focus on its regulatory role and eliminating concerns over a conflict of interest. However, analysts have questioned whether the asking price is too high and warned that interest in acquiring the agency’s 41 casinos may therefore be subdued.

PAGCOR concerns aside, Sevidal noted that the Philippines gaming industry as a whole is booming, with sector-wide GGR up 107% year-on-year and 21% quarter-on-quarter in 1Q23. Compared to the same quarter in 2019, Entertainment City GGR is up by 38% and Clark by 193%.

“We retain our positive view on the Philippine gaming sector following 1Q23 results, which showed sustained industry GGR growth … outpacing the growth of state-run casinos,” Sevidal said.

By Ben Blaschke