Ayala Land limits exposure to offshore gaming market
Property giant Ayala Land Inc. (ALI) is limiting its exposure to the fast-growing offshore gaming market, its top official said.
The offshore gaming industry has been pushing demand for office space in Metro Manila since the Philippine Amusement and Gaming Corp. (Pagcor) introduced the so-called Philippine Offshore Gaming Operations (POGO) landscape in 2016.
But the market is still new and the company still has to study it fully, according to ALI president and CEO Bernard Vincent Dy.
“We need to understand it more,” Dy said in a recent briefing following the company’s annual stockholders’ meeting last week.
Thus, the company is limiting its exposure to POGO to 10 percent or 100,000 square meters of its one million sqm gross leasable office portfolio from seven percent or 70,000 sqm at present.
Dy said ALI would also contain its POGO tenants in its buildings in Circuit Makati, the company’s 21-hectare mixeduse development on the former Sta. Ana race track property of the Philippine Racing Club Inc. (PRCI), so as not mix them with other office tenants in their other business districts.
Industry sources said POGO is boosting demand for office space, but some players like ALI are careful not to put all their eggs in one basket in case the regulatory environment surrounding this fast growing sector changes and slows down the business.
Last year, online gaming accounted for 223,902 sqm of office space from just 56,000 sqm in 2016, according to property consultant David Leechiu.
Pagcor introduced POGO three years ago as a means to “safeguard the welfare of the Filipinos and at the same time meet the agency’s revenue targets to help fund the government’s nation-building programs.”
Under the POGO landscape, Pagcor put in place probity checkers to check the background of operators and capability to sustain their business.
From each licensee, Pagcor charged application and processing fees of $50,000 for e-casino and $40,000 for sports betting and another $200,000 and $150,000, respectively upon approval of the license. There is also a cash bond of $250,000.
Only foreigners are authorized to play, while foreign nationals in the Philippines and Filipinos residing abroad are not allowed to take part in the online gaming activity, according to the POGO rules.
Offshore gaming is conducted via internet using a network and software to be offered exclusively to offshore authorized players who have registered and established an online gaming account with the licensee.
Pagcor has already issued 53 POGO licenses, but is open to issuing more licenses to deserving and worthy operators.
The gaming regulator expects to double its income from POGO to P7.8 billion as early as this year from P3.9 billion in 2017 because of a third party auditor that is auditing the operations of all POGO players. A third party audit expects to translate to higher collections from the offshore industry.
The increase in POGO revenues is expected to boost the country’s total gross gaming revenue to P186 billion this year from P172 billion in 2017.
During the ASEAN Gaming Summit last month, Pagcor chairperson and CEO Andrea Domingo said stricter rules on POGO has helped Pagcor weed out illegal fly-by-night offshore gaming companies.