As the Philippines prepares to inaugurate a new president, billionaire Enrique Razon Jr’s new Metro Manila casino aimed at local players, is based on approvals granted two regimes ago.
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes, editor at large for Inside Asian Gaming and author of Hong Kong On Air
After 34 initial expressions of interest in June, only six bidders stepped up for South Korea’s two gaming license, and just two of these made the required $50 million deposit with their applications. Diminished enthusiasm may change the focus for gaming investment from Incheon, near Seoul, to Jeju Island, off the country’s southern coast.
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air
Pachinko king Kazuo Okada’s $2 billion Philippine casino dream looked like a nightmare. But the Japanese billionaire’s Manila Bay Resorts is now on track to open next year as the largest property in the Entertainment City casino district.
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air
In my interview with Solaire Resort and Casino president Thomas Arasi, there were surprises even before we sat down. Arasi, the former CEO at Marina Bay Sands in Singapore, is betting the Philippines can surprise the gaming world with quality product and service.
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air
The Philippines hopes to get on the regional gaming map with two $1 billion-plus integrated resorts opening in Manila in the coming months. These properties will need to bring in planeloads of foreign players to meet expectations.
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air
The Philippines hopes a quartet of US$1 billion-plus casino resorts will put on the global gaming map. The first of these resorts, Solaire just passed its first anniversary. For Solaire and rival Resorts World Manila, 2013 results suggest revenues aren’t yet growing as fast as aspirations.
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is a blogger for Forbes and author of Hong Kong On Air
On September 12, Solaire Resort and Casino dismissed Las Vegas consultant Global Gaming Asset Management (GGAM) and Solaire’s chief operating officer Michael French, dubbed GGAM’s official representative there. In the October issue of Macau Business (see pages 93-95), I report on the reasons why Solaire’s billionaire owner Enrique Razon Jr fired GGAM.
I’d visited Solaire as part of researching a Macau Business special report on Philippine gaming (see pages 48-55) published in August. In September, when Razon said he wanted to replace French with an experienced hotel man, I immediately thought of Thomas Arasi, the former president CEO at Marina Bay Sands, one of Singapore’s two integrated resorts (IRs), and a veteran of the hospitality industry. Arasi delivered the most profitable quarter for a property opening in the history of Las Vegas Sands Corporation (LVS) in 2010 then quit in January 2011.
Two things impressed me most about Arasi. First, during his time at Marina Bay Sands (MBS), he was a great ambassador for his property and the brand: open, forthright and respectable. Nearly a year after he left MBS, Arasi was on a panel of casino executives that I moderated at a conference that happened to be held at MBS. Arasi introduced key ideas that helped the panel stand out. After the panel, he agreed to answer some questions for an article, so I accompanied him to his favorite coffee stand in the resort.
As we rode down the long escalators in the MBS convention center, Arasi was greeted warmly by every employee we saw. At the coffee counter, the barista remembered Arasi’s brew right down to the soy milk in his double-shot latte. Navigating MBS with Arasi was like joining a popular politician on a campaign swing. A CEO who made such a lasting impression on frontline workers would be a terrific choice for Solaire, or anywhere, really, I thought.
So I wrote to Arasi to tell him that I thought he’d be good fit with Solaire and vice versa. Many of the key people at Solaire worked for him at Marina Bay Sands. I also shared some of my perspectives on Solaire and Manila after my first visit there in 15 years:
[Manila] is an interesting and livable place.. Solaire is a first rate property and has set the bar high for the next three IRs… Entertainment City is going to bring the kind of buzz to Manila that the IRs did in Singapore. But Manila’s eight times bigger, so the impact will be diluted. Still, it’s a happening place.
I didn’t hear from Arasi before I filed my story. But just before the October issue of Macau Business went to press, news broke that Solaire had named Arasi as its new president and chief operating officer. I then received a pleasant note from Arasi, though no one has offered me a headhunting fee yet. I just hope Arasi’s tenure at Solaire proves as successful as I thought it would be for all sides.
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air
Vietnam and the Philippines want to move into the top tier of Asian casino destinations. Each country recently opened five-start casino resorts meant to anchor new casino districts, Solaire Resort and Casino in Manila and The Grand-Ho Tram Strip in southern Vietnam. My Asia Times article outlines some key similarities and differences between the two developments and their environs.
One of the oddities in the story is MGM Resorts International’s unkept promise to manage the initial resort in southern Vietnam’s Ho Tram Strip under the name MGM Grand Ho Tram, while US casino operators have steered clear of the Philippines.
The surprise isn’t that MGM withdrew from Vietnam, but that it ever considered it doing business there. As a Las Vegas operator, MGM is legally obligated to follow Nevada state regulations wherever it does business. The company ran into the extraterritorial reach of US regulators when New Jersey ordered it to divest in its holdings in Macau or in Atlantic City’s market-leading Borgata Hotel, Casino and Spa due to its partnership with Pansy Ho. Ho’s father, Macau’s venerable casino kingpin Stanley Ho, has been long been suspected of underworld ties, though he’s never been charged with a crime.
MGM has tried unsuccessfully to sell its half of Borgata for the past three years, and early this year, applied to New Jersey regulators to keep it. The company argued that its 2011 MGM China public listing reduced Ho to a minority partner, though she still holds the co-charperson title and is seen by some as the tail that wags the dog there.
When MGM agreed to manage Ho Tram’s first resort in 2008, there was no reason to believe that Vietnam’s gaming regulations would meet US standards. Vietnam didn’t even have a gaming law back then, and it still doesn’t have comprehensive regulations. Rules that exist are created behind closed doors and handed down by decree.
Those circumstances didn’t deter Pinnacle Entertainment, a second tier US casino company which bought into the Ho Tram project in 2010 and agreed to operate Ho Tram’s second resort. Whether Pinnacle or others build addition Ho Tram resorts will hinge on the success of The Grand. Pinnacle has since hedged its bets, writing down its entire $117 million investment in Ho Tram.
Pinnacle wasn’t alone in its enthusiasm for Vietnam, a country of nearly 100 million that has a land border with China and history of hostility with the Middle Kingdom. Las Vegas Sands, owners of the Venetian in Las Vegas and Macau, expressed serious interest in building its own billion dollar resort in Vietnam, if the country would let it citizens gamble, a step that Vietnam remains unlikely to take.
By contrast, no US gaming operator has shown any interest in the Philippines, though it has a population size similar to Vietnam, higher GDP per capita (in purchasing power terms), and a proven gaming sector for local and foreign players. The main reason cited for the US cold shoulder is that Philippine gaming regulator Pagcor also operates casinos and that dual role troubles US authorities. From the perspective of a layperson, not a lawyer, that seems to be an excuse, rather than a reason.
There’s no denying that the Philippines in general, and Pagcor in particular, have a history of corruption. Casino magnate Steve Wynn used former Wynn Resorts vice chairman Kazuo Okada’s investment in a Philippines casino as a pretext to buy out Okada at a significant discount, sparking a battle of the billionaires playing out in law enforcement agencies and courtrooms on both sides of the Pacific. Among other things, Wynn claims associates of Okada, chairman of Japanese pachinko giant Universal Entertainment, gave $40 million to a consultant close to Pagcor’s former chairman, who already faces unrelated graft charges.
As bad as that sounds, at least the Philippines has a semblance of regulation and rule of law, qualities that have been significantly strengthened under reformist President Benigno Aquino. For a Macau Business special report on Philippine gaming (see pages 48-54), I spent hours talking with Pagcor and other government officials as well as business people, and I was convinced Pagcor has the will to regulate gaming to regional standards, in other words, as strictly as Macau, which has proven good enough for US authorities other than New Jersey.
Between the bribery allegations and land issue, there’s a growing chance that Okada could lose his Phippine casino license or choose to sell out under that threat. Pagcor says it wants four resorts in Entertainment City, as currently planned, so an Okada withdrawal would open the door for an American operator to move in and give Manila’s world class ambitions a big boost. The Philippines doesn’t need a US casino operator to become an international gaming destination, but it would lend credibility, just as MGM did for Vietnam during its brief engagement there.
At this stage of the global gaming business development, having a casino destination without an American brand is like having a soda fountain without Coke or Pepsi. However, as Asia continues to overshadow Las Vegas as the hub of the global gaming business – last year gaming revenue in Macau alone topped the entire US commercial casino industry – it behooves American casino brands to get in the game where the money is, to ensure they remain the industry’s Coke and Pepsi rather than become the next Kodak and Chrysler.
They may also want to listen to Solaire’s chief executive officer and controlling shareholder Enrique “Ricky” Razon Jr, the Philippine billionaire who runs global ports operator International Container Terminal Services. A welcome gale of fresh air at last week’s Forbes 2013 Global CEO Conference, Razon noted, “Everybody talks about China and India. I make more money in Madagascar than in China and India combined. Nobody wants to be there, so we want to be there.”
Totally globalized native New Yorker and former broadcast news producer Muhammad Cohen is author of Hong Kong On Air
Muhammad Cohen 