Rodrigo Duterte

Murky past catches up with new PAGCOR

Roel Landingin

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COMING SOON. Artist's rendition of the plans for Pagcor City

MANILA, Philippines – American gaming group Wynn Resorts’ weekend salvo from Las Vegas against major shareholder and director Kazuo Okada has found a soft target halfway across the globe in the Philippine Amusement and Gaming Corp (PAGCOR) and its top officials.

Inevitably, the state gaming firm’s flagship project, the $15 billion Las Vegas style strip of casino and entertainment resorts along Manila Bay, is also in the line of fire.

However the legal dispute pans out, the allegations that Okada gave $110,000 in cash and gift payments to 2 chief gaming regulators of PAGCOR revives questions about the nebulous process that governed the granting of provisional casino license to Okada’s company, Universal Entertainment Corp (formerly Aruze Corp) and 3 other investor groups back in 2008.

These groups, which include Henry Sy’s Belle Corp., Enrique Razon’s Bloomberry and Andrew Tan and Genting’s Travelers International Hotel, are now in the early phases of building their respective integrated gaming and leisure complexes on land reclaimed from the bay.

It would not be surprising for Catholic bishops and other anti-gambling advocates to exploit the controversy and press President Benigno Aquino III or Congress to investigate and even freeze the PAGCOR flagship project. Aquino’s critics and political opponents will likely jump on the bandwagon to embarrass the administration and its appointees in the state gaming firm.

In a sense, that is just the project’s dark and murky past catching up with current government gaming officials led by Cristino Naguiat Jr, whom Aquino appointed as the new PAGCOR chairman to clean up and reform the allegedly graft ridden gaming firm.

One of Naguiat’s first actions after getting the post was to file a string of anti-graft complaints against the former PAGCOR chairman, Ephraim Genuino, with the Department of Justice. One of the accusations against the former gaming chief was diverting part of Okada’s rice donations for typhoon victims to his son’s election campaign.

All these years, PAGCOR has not yet come out clean on how it selected the 4 investor groups to build the integrated casino leisure resorts along Manila Bay back in 2008. Genuino announced the project in March 2007 shortly after PAGCOR’s franchise was extended by Congress. By the middle of 2008, PAGCOR was firming up preliminary agreements with the 4 investor groups, which were selected apparently through a negotiated process.

One of the groups, Bloomberry, did not yet have the backing of an international gaming firm but was nonetheless considered by PAGCOR. Bloomberry representatives had claimed their international partner was James Packer, chairman of Crown, the Australian-listed Crown gaming company, but Crown denied it.

According to the Philippine Center for Investigative Journalism, which wrote a report in 2008 on the PAGCOR project, what Bloomberry lacked in foreign partnerships, “it more than makes up for in terms of political connections,” referring to two close allies of President Gloria Macapagal Arroyo who had links to the company: Jose ‘Pepito’ Ch. Alvarez and Enrique ‘Ricky’ K. Razon Jr.

At that time, PAGCOR officials merely dismissed Razon’s involvement as rumor, and Razon himself refused to comment on the reports. Only much later did Razon publicly acknowledge he was a major investor in Bloomberry.

Contrast that with Singapore’s open and competitive bidding process to select investors for its twin integrated resorts projects in Marina Bay and Sentosa. It launched a request for concept in December 2004 and received 19 offers.

Four companies submitted formal bids for Marina Bay, and Singapore chose the winner, Las Vegas Sands, in May 2006. Three consortia offered bids for Sentosa in October 2006, and Singapore chose Genting International and Star Cruises in December 2006.

In view of the grave implications of Wynn Resorts’ accusation, PAGCOR’s statement on Monday on the matter leaves much to be desired. It seems that incumbent PAGCOR officials are more interested in deflecting possible suspicions coming their way towards their predecessors rather than getting into the bottom of the allegations.

If PAGCOR officials were half serious about getting the whole truth about the accusations, their first course of action should be to get in touch with Wynn Resorts and ask for a copy of the report prepared by a team of private US investigators led by Louis J. Freeh, the former Director of the Federal Bureau of Investigation.

Instead, they seem to have made up their minds to believe Okada’s version even before they had a chance to see the Freeh report.

The PAGCOR statement points out that Okada’s provisional license was granted in 2008, long before the current officials of the state gaming firm were appointed to their posts. What is unmentioned is current gaming officials initiated a review of the temporary licenses for Universal Entertainment and other license holders shortly after the new Aquino administration came to power in the middle of 2010.

PAGCOR officials affirmed the validity of the licenses after a slight tweaking of the terms to boost the government’s revenue share and toughen the requirements.

As a first step towards clearing up doubts about the selection of investors for its flagship project, PAGCOR should disclose to the public the terms of the temporary operating licenses granted to the 4 investor groups.

Current gaming officials should also explain why they affirmed the agreements in spite of the lack of transparency and competition that surrounded the process, including changes in the terms of the licenses after the Aquino administration came to power.

Of course, incumbent PAGCOR officials also have some personal explaining to do in connection with the complimentary accommodations they admitted receiving from Wynn Resorts in their visits to its casinos and hotels in Macau and Las Vagas.

Naguiat denies that current PAGCOR officials  got any cash at all. He also clarifies that they had a total of only 3 visits to Wynn Resorts casinos in Macau and Las Vegas, and thus could not have incurred bills amounting to $110,000 from July 2010 up the present.

Besides, he adds, complimentary accommodations for visiting casino executives are “part of standard industry courtesy and reciprocity,” and that PAGCOR itself grants visiting casino executives free stay at its partner hotels.

All these sound reasonable if PAGCOR officials are merely casino executives. But they are also the country’s casino regulators with the power to approve or deny multi-billion dollars’ worth of gaming investments.

The $110,000 question is: who are the PAGCOR officials who benefited from Okada’s generosity, and what role did they play, if any, in reviewing and approving his application for a casino license. –

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