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Asian Gambling Industry Invests In Philippines

by Mary Swire,, Hong Kong

24 July 2012

Investments in the gaming industry in the Philippines are booming thanks in part to the government's strategy of luring investors to Manila with the help of lower taxes and other incentives.

In one example, billionaires Henry Sy, Lawrence Ho and James Packer recently signed a Memorandum Of Agreement for a USD1n gaming joint venture in Manila while Bloomberry Resorts Corp is luring overseas Filipinos working in more traditional gambling centres like Macau and Singapore back to Manila.

This comes as part of the strategy of the government of the Philippines to set up a competitive gaming centre in Manila with a view to enticing low-end Asian high-net-worth individuals away from expensive Singapore and Macau towards the cheaper Philippines.

The new joint venture between the three billionaires paves the way for the issuing of a fourth gaming franchise in the Manila Entertainment City. As part of government policy to boost investments in the gaming industry, the government requires a minimum USD1bn for the issuance of each new franchise. However, by registering with the Philippines Economic Zone Authority as a tourism economic zone, the project can take advantage of tax incentives. Furthermore, taxes on gambling are also much lower in the Philippines than in Macau, where casinos are taxed at up to 40% on gross gaming revenue. As a Special Administrative Region of the People's Republic of China, gamblers in Macau are also subject to certain restrictions imposed by the central government in Beijing.

The freshly-sealed joint venture between the three tycoons is not the only new investment in the gaming city. Enrique Razon, chairman of Bloomberry resorts corp. has already poached 400 skilled overseas Filipinos from Macau, which is likely to exacerbate the talent shortage in Macau with its low unemployment rate of 2%.

The two other franchisees, billionaire Kazuo Okada's Universal Entertainment Corp and tycoon Andrew Tan's Alliance Global Group, have also agreed to add PHP45bn (USD1.1bn) to their existing investments into a real estate project in the Entertainment City. Okada's Group has already announced it would invest a total USD4bn in the Philippines over the next few years.

TAGS: tax | tax incentives | gambling tax | China | Macau | Philippines | Singapore | offshore | gambling | unemployment | offshore e-gaming

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