Manila gambles on attracting the high rollers
Casinos are being opened on the edge of capital to draw big spenders away from Macau
The first casino in the hub that is the Philippines' answer to Macau opened at the weekend, and the container port services billionaire Enrique Razon will have the gamblers to himself for now.
Razon's US$1.2 billion Solaire Manila casino will have a monopoly in the Philippine capital city's new entertainment and gambling complex in Pasay city until the country's richest man, Henry Sy, opens a venture there next year.
The two billionaires are investing in casinos as the Philippines seeks to emulate the success of Macau, where gamblers from mainland China fuelled a 14 per cent surge in revenue to a record US$38 billion last year.
New resorts could help the Philippines' gaming market expand fivefold to US$10 billion by 2017, its chief regulator estimates.
Allan Yu, a fund manager at Metropolitan Bank & Trust, said: "Razon's venture is closely watched because it can prove if the Philippines can get a bigger share of the junket and VIP market. It's very promising and it looks like it's going to take off."
The gaming area in Solaire is decorated with columns covered in mother-of-pearl and a floor embedded with coloured glass. It is designed to get 45 per cent of its revenue from VIPs, or high-stake gamblers, according to Razon's partner Bradley Stone, the president of Global Gaming Asset Management.
Razon, who controls 80 per cent of Bloomberry Resorts and Hotels, owner of the Solaire project, holds one of four casino licences that the Philippines awarded in 2008 and 2009 for the 110-hectare entertainment hub, which is close to Manila Bay.
Sy and Melco Crown Entertainment are scheduled to jointly open a casino resort there in July next year.
A company controlled by the Japanese Kazuo Okada and a joint venture between the Philippines' Andrew Tan and Genting Hong Kong are expected to open two more casinos in the complex between 2015 and 2016.
Razon faces existing competition outside the new hub, including from a gaming complex that Genting and Tan opened in 2009 in front of a terminal at the capital's international airport. Philippine Amusement and Gaming, the state regulator and casino operator, also has four casinos in the capital.
Razon has so far spent US$750 million to build Solaire's first phase, and he was spending a further US$400 million for an expansion that would be completed by the third quarter of next year, Stone said. The gaming market could offer a 30 per cent return on investments, he said.