The Philippine Casino Gaming Market
The Philippine Casino Gaming Market
An exemplary case of competitive factors driving market recovery and growth in a post-Covid era
While the profound impacts of the Covid-19 pandemic continue to linger in many Asia Pacific gaming markets , the Philippine casino industry has been leading the region ’ s recovery and displaying signs of growth . The following examines how diversification and other key market advantages provides an exemplary case for post-Covid era gaming across Asia .
Land-based casino gaming in the Philippines was legalized in 1976 . Since then , the industry has grown steadily over the past few decades ( except during the pandemic-affected years ) and has successfully secured its position among the top three gaming markets in Asia . From 2012 to 2019 , the market ’ s gross gaming revenue ( GGR ) grew at a compound annual growth rate ( CAGR ) of more than 17 percent to achieve a record GGR of PHP 216.4 billion in 2019 , more than three times the GGR in 2012 .
Casino Gaming GGR in the Philippines ( PHP in billions )
Source : Philippine Amusement and Gaming Corporation ( PAGCOR )
During 2020 and 2021 , the market was severely impacted by protective measures instituted to curb the global pandemic , including closures , lockdowns , capacity limits and other restrictions . Nevertheless , the Philippine market ’ s GGR in the first half of 2022 has demonstrated a strong rebound with the recovery pace expected to accelerate — the 2022 total GGR estimate is anticipated to exceed the 2018 level and to reach nearly 90 percent of the 2019 level .
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What is fueling the recovery and growth of the Philippine casino market ? Our analysis indicates that the critical drivers include diversified product offerings , well-balanced market segments , expanding and enhanced capacity , an advantageous gaming tax regime , a solid workforce available at competitive costs , and the agglomeration of high-quality integrated resorts ( IRs ) in the country .
Diversification
The Entertainment City district in Metro Manila , the pride of the country , is a truly remarkable example of casino gaming and diversified leisure activities . Home to a number of prominent world-class resort complexes , the area provides a wide range of lodging , gaming , and other entertainment offerings . Moreover , Entertainment City arguably represents one of the world ’ s top IR clusters , along with the Las Vegas Strip and the Cotai Strip in Macau .
While these destinations have varying degrees of dependency on gambling , the agglomeration of casino facilities has undoubtedly shaped all three into top tourist destinations . The resulting “ cluster effect ” is expected to drive a strong and sustainable increase in future gaming and tourism demand .
The country ’ s anchor destination , Entertainment City , is complemented by other notable casino resort areas in Cebu and Clark . Cebu , a significant tourism destination and the second largest metropolitan area ( after Metro Manila ) in the Philippines , recently welcomed a new five-star IR , NUSTAR Resort and Casino , with Emerald Bay Resort and Casino expected to open next year .
The Clark Freeport Zone , a redevelopment of the former U . S . air base about 50 miles north of Metro Manila , is home to multiple high-quality gaming and hospitality properties . The upward dynamics in these markets unequivocally endorse the importance of diversification in terms of product offerings , source markets and beyond , which had been emphasized by many before the pandemic and have become even more critical in the post-Covid era .
Visitation
Fueled by solid local market segments and gradually increasing international visitation , the Philippine gaming market has been able to achieve substantial progress since early 2022 . Within the current Asian gaming landscape , one of the most noticeable ongoing changes is the shift of junket-channeled VIP play
Solid Recovery Beginning in Q2 2022 ( PHP in billions )
Source : PAGCOR , The Innovation Group
20 Global Gaming Business DECEMBER 2022