Philippine billionaire John Gokongwei will become a partner of Japanese pachinko magnate Kazuo Okada to build a billion-dollar casino in Manila amid efforts by the Southeast Asian nation to bring in more tourists.
Robinsons Land, controlled by Gokongwei, signed a preliminary agreement with Okada's Universal Entertainment Group for the project, the Manila-based developer and Tokyo-based Universal said in separate statements yesterday. They didn't provide the cost or any financial details.
However, Okada holds one of four licences handed out by the Philippine gaming regulator (Pagcor) to build casinos worth at least US$1 billion each at the Entertainment City complex on Manila Bay.
The Philippine government wants to build a gaming hub in Manila. The Philippines can surpass Las Vegas and "challenge" Macau and Singapore in gaming revenues in the next five years with the opening of the four Entertainment City casinos, according to the Manila-unit of property consultant CBRE Group.
Okada and Gokongwei's venture will compete with partnerships between Philippine billionaire Andrew Tan and Genting Hong Kong; a venture of Philippine billionaire Henry Sy and Melco Crown Entertainment; and Bloomberry Resorts, controlled by port magnate Enrique Razon. Razon's casino will be the first to open, in March next year.
The Okada project was roiled in controversy earlier this year when the Japanese businessman was sued in the United States by American partner Steve Wynn in a case involving their casino businesses in Las Vegas and Macau.
Philippine President Benigno Aquino in February ordered an inquiry into Wynn's allegations Okada's men gave illegal gifts to top Pagcor officials amid the Japanese man's pursuit of his Manila casino licence.
Pagcor chief Cristino Naguiat has admitted getting free accommodation for himself and his family at a Macau casino jointly owned by Okada and Wynn, but insisted it was an industry-wide practice that violated no law.
The government has yet to announce the result of the investigation.
"Okada gets a partner who has a strong expertise of the domestic market, while Gokongwei gains entry into a sunrise industry that will complement his businesses," Jonathan Ravelas, chief market strategist at Manila-based BDO Unibank, said of yesterday's announced deal.
The final contract will be signed by January 31, according to Universal's statement. "Robinsons Land will be in charge of the development of commercial facilities and budget hotels and housing facilities for the casino resort project," Universal said.
Universal, which makes the pinball-like machines used in pachinko parlours where customers play for prizes, said in September 2011 it would invest US$2.3 billion in a casino resort venture in the Philippines, but it is not clear whether this pledge still stands.
Forbes magazine lists the Gokongwei family, which is also into aviation, banking, and food manufacturing, as the fourth-richest in the Philippines with a net worth of US$3.2 billion.
Robinsons Land is the nation's second-largest shopping mall operator, while parent JG Summit's other ventures include Cebu Air, the nation's biggest budget carrier.
"This diversification into casinos is a good step and value enhancing for Robinsons Land," said James Lago, an analyst at PCCI Securities Brokers in Manila.
Bloomberg and Agence France-Presse