Why Pagcor 'provisionally' approved Chinese firm's Boracay casino
MANILA, Philippines – The operator of a soon-to-be $500-million, 23-hectare integrated resort and casino in Boracay recently bagged a provisional license from the Philippines' gaming regulator, raising concerns about its timing with the island's impending 6-month closure.
Boracay Philippines Resort and Leisure Corporation (BPRLC) – a joint venture between Chinese casino operator Galaxy Entertainment Group and Leisure & Resorts World Corporation – on March 21 bagged a provisional gaming license. This was just a few days before President Rodrigo Duterte ordered the 6-month closure of the island starting April 26.
Boracay stakeholders and economists have questioned the government's intentions for closing Boracay to tourists. (READ: LIST: Planned developments in Boracay)
Initial requirements met
Defending its decision, the Philippine Amusement and Gaming Corporation (Pagcor) said it granted BPRLC the provisional license after the group met the initial documentary requirements, including a Certificate of No Objection and a minimum investment commitment of $300 million.
"Pagcor, being a government entity under the Office of the President, abides by the laws and orders of the land," the gaming regulator said in a statement on Wednesday, April 11.
"As regulator, it ensures that its licensees comply with pertinent laws, rules, regulations, and ordinances promulgated by authorities relative to the establishment and operation of casinos," it added.
It was on August 3, 2017 when AB Leisure Global Incorporated, a subsidiary of Leisure & Resorts World, formally applied for a license to operate a casino in Boracay.
"The Letter of Intent was received by Pagcor together with a Certificate of No Objection from the local government of Malay, Aklan," Pagcor said.
A deed of assignment between AB Leisure Global and BPRLC was then signed on January 9, 2018.
Pagcor said BPRLC's application was favorably considered, as "Boracay falls under the Greenfield zone category,"
The Greenfield zone category refers to an area within rural provinces, cities, or municipalities with high potential for tourism development and no existing casino.
Start of a long process
"The provisional license is only the start of a very long and tedious process of compliance," Pagcor said.
The regulator added that the license is temporary until the group increases its minimum investment commitment to $1 billion and completes the project. If it meets these two requirements, only then would it be granted a regular casino gaming license. (READ: DENR to identify 'critical habitat' areas in Boracay)
Pagcor said every integrated resort operator must receive a provisional license first before it gives a Notice to Commence Casino Operations and eventually, a regular casino gaming license.
Regardless of location, Pagcor said the group is "only allowed to allocate not more than 7.5% of the total gross floor area for gaming."
"Moreover, allowable gaming facilities are restricted based on the number of hotel rooms – 4 standard room keys are required for every gaming table while two standard rooms are required for every 3 electronic gaming machines," it added.
Pagcor said BPRLC still needs to submit proof of ownership or lease of the land where the casino-resort would be built, a detailed project implementation and development plan, and an escrow account.
The resort and casino operator is also required to submit a performance assurance, surety bond, financial statement, and documentary requirements, among others.
Galaxy Entertainment Group will be in charge of the development and operations of the Boracay project.
Since Duterte imposed a moratorium on new casinos effective January 13, 2018, Pagcor has also stopped accepting and evaluating applications.
Back in December 2017, Galaxy Entertainment chairman and founder Lui Che Woo paid a courtesy call on Duterte to discuss his firm's plan of investing as much as $500 million for a "low-rise, eco-friendly resort development" in Boracay.
Galaxy Entertainment vice chairman Lui Francis also said: "We are very excited about the prospect of investing up to $500 million into a proposed premium quality, low-rise, eco-friendly resort development located in Boracay, the world's premier beach destination." – Rappler.com