Bloomberry entices Philippine workers from Macau for a casino in Manila
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The Philippine casino market is set to expand into a us$ 3 billion industry by 2015 from us$ 1.3 billion last year.
Solaire needs as many as 4,500 workers and will open in the first quarter of 2013. Its recruitment efforts show how Macau faces rising competition for casino workers and high-stake gamblers from smaller hubs such as the Philippines and Singapore. Visitors from mainland China boosted revenue in the former Portuguese colony by 42 percent to us$ 34 billion in 2011, as casino operators from Las Vegas Sands to Wynn Resorts expanded.
“A Chinese high-roller is used to a style in Macau,” said French, referring to high-stake betters. “So why not hire someone who has been in that market for two or three years, who knows how these gamers think, understands the service style and the mentality of the Chinese gamer, and bring them back?”
The Philippine casino market is set to expand into a us$ 3 billion industry by 2015 from us$ 1.3 billion last year, CLSA Asia- Pacific Markets estimates. “The Philippines’ gain is Macau’s loss,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. (BDO) in Manila, of Solaire’s push to draw more workers from Macau.
The jobless rate in the former Portuguese colony of about 500,000 people is 2 percent, the lowest since Bloomberg began tracking the data in 2002, making it harder for local casino operators to find workers. By contrast, the Philippine unemployment rate was 6.9 percent in June.
Bloomberry holds one of four licenses the Philippines awarded to operate gambling and hotel complexes in the 110- hectare Entertainment City Manila. Japanese billionaire Kazuo Okada, Genting Hong Kong and the SM Group of the Philippines’ richest man Henry Sy also have permits.
The company’s loss widened to us$ 2.4 million in the first two months of 2012 from us$ 418,621 a year earlier as costs rose more than sixfold. Bloomberry rose 1.3 percent to 9.92 pesos at the mid-day break in Manila, snapping two days of declines. The stock is down 65 percent this year amid plans to sell more shares to meet regulatory rules on the public ownership of companies.
Among Macau casino operators, Sands China is up 8 percent, SJM Holdings has gained 11 percent and MGM China Holdings has added 10 percent.
Locals will make up a majority of Bloomberry’s patrons in the first year, and it will take two years to three years to increase the share of international gamblers, French said. His ideal client mix is an even split of local and foreign gamblers, who are mostly interested in high-stakes betting. Such high- rollers can bet as much as us$ 1 million per trip and at times, per hand in baccarat, he estimates.
Philippine casinos such as Bloomberry “won’t probably get the top high rollers,” said Richard Laneda, an analyst at Manila-based CitisecOnline. “But these can bring in the lower end of the VIP market in Macau or Singapore.”
Philippine billionaire Enrique Razon, Bloomberry’s chairman, said on June 25 that the company will compete with integrated casino resorts in Macau, Singapore and other developments in Asia. Entertainment City Manila can in a shorter period surpass the gains made by Singapore, where the gaming industry generated us$ 6.5 billion in revenue in 2011, Razon said at that time.
Lower Tax Rate
A lower charge or levy for casino operators in the Philippines than in Macau and Singapore will help Bloomberry and other Manila casinos, French said in the interview. The Philippines collects a regulatory fee of 15 percent to 17 percent on revenue from so-called high rollers compared with Macau’s 40 percent and Singapore’s 25 percent, he estimates. Manila is also more accessible than Macau, and improvements in infrastructure and rising investor confidence should bolster its allure, he said.
The Philippines estimates the Manila casino development will add 1 million tourists each year and employ 40,000. Bloomberry plans to hold one more job fair each in Macau and Singapore to fill the remaining 150 management positions in the group, targeting Filipinos who have gained experience working in casinos, hotels and luxury liners, French said.
About 1.3 million citizens left the Philippines last year for jobs overseas, according to government data. Money Filipinos abroad sent home made up almost 10 percent of the economy that grew to us$ 225 billion last year. The country’s economy grew 6.4 percent in the first quarter, the fastest pace in Southeast Asia. Economic expansion in the three months ended June remained healthy, central bank Governor Amando Tetangco said on July 13.
Money sent home by more than 9.4 million Filipinos abroad is the Philippines’ largest source of foreign exchange after exports. Cash transfers climbed to a record $20.1 billion in 2011 and the central bank expects remittances to rise 5 percent this year.
Bloomberry is bringing in Filipinos with at least two years of experience and an understanding of the business, French said. Solaire’s senior vice president for gaming operations is a returning Filipino who has worked for hotels in the Chinese city and Singapore, and its director for hotel services comes from Macau operator Galaxy Entertainment Group, French said. Its vice president for table games is a Filipina coming home after years overseas.
“This is not a case of a bunch of expatriates running the company,” French said. “We’re bringing in Filipinos who understand the business and these are world-class folk.”