SUMMARY
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MANILA, Philippines – South Korea has rejected the bid of Japanese billionaire Kazuo Okada’s Universal Entertainment for preliminary casino licenses in a surprise move that could delay plans to put Incheon in the Asian gambling map.
Tiger Resorts Leisure and Entertainment Inc, a unit of Okada-led Universal, has been granted a right to operate a $2-billion integrated casino-entertainment resort — and is being investigated for alleged illegal payments to officials — in Manila.
The Philippines, just like South Korea, is vying to be one of the stops for Asian VIP gamblers and high-end tourists through its Pagcor Entertainment City in a sprawling property in Pasay City.
Citing the spokesperson of South Korea’s Ministry of Culture, Sports and Tourism, Reuters reported on June 21 that both the requests for casino licenses of the Okada-led Universal Entertainment and the consortium of Caesars Entertainment Corp and Lippo Limited were rejected.
No reason was given for the decision. Both Universal Entertainment and Ceasars-Lippo consortium applied to build a integrated developments in an economic zone in Incheon meant to attract tourists and investors.
Reuters cited concerns over the Ceasar-Lippo’s credit rating, which Moody’s Investors Service lowered due to adverse gaming revenue trends.
Boardroom battles, investigations
When Okada was dragged into a bitter boardroom war with former business partner-turned-bitter rival Steve Wynn in Wynn Resort Ltd, Okada’s first stop was in Manila where he visited officials at the Philippine Amusement and Gaming Corp. (Pagcor), which regulates and operates casino operations.
Okada’s transactions with Pagcor officials for his group’s $2 billion Manila Bay Resorts complex — one of the four developments Pagcor has approved — was the subject of various investigations.
The Wynn board used the “Freeh” report prepared by a former US Federal Bureau Investigation (FBI) chief to oust Okada from the Wynn Resort board.
The Nevada gaming board, with the assistance of the Philippines’ National Bureau of Investigation (NBI), also tried to establish a money trail for some US$40 million alleged illegal payment by Okada’s Universal Entertainment in the US to Philippine officials who have approved tax grants for the Okada group sometime in 2010.
The Gokongwei group, led by Filipino tycoon John Gokongwei Jr., has recently decided not to pursue their retail partnership with the Okada group for the Entertainment City project.
No bribery
Okada’s group countered the allegations in a June 22 statement, citing the results of an investigation by a “3rd party” it had commissioned, according to Inquirer’s report.
Universal Entertainment said the commissioned report showed that the Freeh report and the allegations of improper gifts and cash payments to Pagcor officials “lacked credibility.”
“The investigation made it clear that there is no fact that Universal offered illegal funds. It also revealed that despite our governance problem, a significant amount of fund was transferred in breach of the internal regulations by the employees in charge of arranging remittance. It also became clear that we were in a position of victims in a sense,” Universal was quoted as saying.
The “governance problem” was reportedly regarding a “road” access that a staff at the Philippine project failed to promptly report to Universal staff in the US who triggered the payment.
The US2.5 million payment to Rodolfo Soriano, a businessman with ties to the former Pagcor chief, was reportedly an internal “mistake” and not meant to a bribe Philippine officials. – Rappler.com
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