COVID-19 Changes The Game: Will PAGCOR Survive?

Article by : Helen Nov 10, 2020

Not long ago, The Philippines Amusement and Gaming Corp faced yet another challenge: COVID-19 became a disaster for big and small businesses alike. The Philippines’ economy suffered greatly from the total lockdown, with many local organizations struggling to make ends meet and even losing their licenses. The company has seen nothing but a decrease in its revenue for months before reopening and finally starting to make some profit. While the corp seems to be back on track, PAGCOR is still far from re-establishing its former glory: it planned to become the biggest ASEAN gaming destination and fund nation-building programs by 2022. Nevertheless, COVID-19 has made this project hardly manageable.

Revenue Troubles

After reopening with all necessary precautions to make the casino safe for both patrons and staff, PAGCOR encountered an inevitable downfall. Despite reporting a slow increase in revenue after watching it slide down for several months, the corp isn’t doing as well as during the previous years. The financial report on the first three quarters of 2020 shows that they made $461.7 million, which is only 30% of last year’s income. After registering $102.72 million of net income for all operations in 2019, the entity’s income lowered to $2.47 million in 2020.

However, the drop in revenue wasn’t the only financial problem PAGCOR faced. The regulatory fees dropped to 30% as well, barely reaching $174.54 million. On the bright side, the sum delivered by offshore gaming operators decreased only by 6%, bringing the corp $77.75 million. This helped to ease the $242.36 million of taxes it had to pay, not to mention PAGCOR has to give up 50% of the earnings to the Philippines Bureau of Treasury as a part of legal obligation.

Despite these unpleasant facts, no one can deny that even such a situation is better than the downfall the company observed at the beginning of 2020. Earlier this year, it reported a loss of $32.5 million.

However, things changed in the third quarter: the company managed to produce a profit of around $35 million. It is worth mentioning that PAGCOR tries to be as clear about its finances as possible. The company also takes pride in being a part of many charitable organizations, making regular donations, and securing the Philippines’ economy. All fundings, fundamental programs and reports can be found on their transparency page.

No Grand Reopening

After removing the total lockdown and reopening some of the casinos in August, a lot of private and government-funded properties like Okada Manila, City of Dreams Manila, Resorts World Manila, and Solaire Resort & Casino started their business only at 30% of their usual capacity, with some scheduling their reopening only for September. This, however, was not the end of their troubles. During quarantine, some of the well-known gaming platforms have lost their licenses. The question of banning online casinos has been debated in the Philippines for more than a year as China urges the neighboring country to stop cross-border gambling. It is also supported by the country’s Vice President, Maria Leonor Robredo, who links online gambling to crime and bribery.

Allowing online gaming in certain areas has helped to minimize the losses caused by COVID-19. Right now, online casinos are gaining more and more popularity on the market. As a result, the industry receives more and more attention, with the Philippines being no exception. PAGCOR has already announced looking into the possibilities of making the gaming industry accessible for the locals and is likely to make it the solution to the problem of decreased incomes.

Helen

Chief Editor

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