Pacgor posts H1 loss as Manila casinos remain closed

4 August 2020

The Philippine Amusement and Gaming Corporation (Pagor) has reported heavy losses for the first half of 2020, as the country’s ongoing struggles with novel coronavirus (Covid-19) continue to push back the reopening of integrated resorts in the capital Manila.

Pagcor reported total income from gaming operations of PHP18.44bn (£286.6m/€318.2m/$375.6m) for the six months to 30 June. This represents a year-on-year decline of 49.6%, from H1 2019’s PHP36.6bn total.

It also suggests that the bulk of income was generated in the first quarter of the year, when Covid-19 only hit near the end of the period. For the three months to 30 March, gaming income amounted to PHP17.22bn.

Casinos in the country were forced to close as a result of the pandemic from 15 March, with the country’s igaming licensees, the Philippines Offshore Gaming Operators (POGOs), following from 18 March.

Casinos in four locations were permitted to resume operations - though at 50% capacity - from June, though Manila’s casinos are facing more than five months closed. The reopening date for venues has been pushed back weekly, amid rising Covid-19 cases and deaths, and now looks unlikely before mid-August.

While POGOs were permitted to resume operations from May, provided their tax affairs were up to date, few have done so, prompting Pagcor to issue a public warning about unlicensed gaming sites. Some have even reportedly withdrawn from the market as a result of the shut-down.

Of the PHP18.44bn in income, PHP9.68bn was paid to the Philippines government and Bureau of Internal Revenue in taxes and fees, again down 49.6% year-on-year. This comprised PHP922.2m through the 5% franchise tax on licensees, and PHP8.73bn to the government, as well as PHP30.0m to the Dangerous Drugs Board.

After income from other sources and related services was factored in, net income for H1 fell 48.5% to PHP9.73bn.

Expenses for the period also declined, through this was significantly less steep than the fall in revenue. Pagcor’s outgoings were PHP11.32bn, compared to PHP15.80bn in the prior year, with staff related costs coming in at PHP3.77bn; maintenance and operating expenses at PHP2.57bn, while finance expenses amounted to PHP11,429.

Corporate social responsibility contributions in the first six months of the year were PHP4.53bn, and after the Philippine Sports Commission’s PHP438.0m levy was paid, pre-tax loss for H1 stood at PHP158bn.

After PHP11.7m in income taxes, net loss for the six months stood at PHP1.60bn, compared to a PHP3.08bn profit for H1 2019.