In the Philippines the new President, Begnino Aquino III, who commenced his 6-year term two weeks ago, has ordered a review of the books of the Philippine Amusement and Gaming Corp (Pagcor). The state-owned casino franchise owner is being investigated for possible irregularities and Aquino believes that privatisation of the nation’s gambling industry is the way forward but only after the investigation is completed.

By law half of Pagcor income should go straight to the national budget with the rest going to host cities and paying various taxes. The review of Pagcor books is intended to ascertain whether the legal beneficiaries have been receiving what is due to them. Recently the new Pagor chief, Christino Naguiat, has begun looking into the reported hiring of over 300 consultants and midnight appointees by the previous management under Ephraim Genuino.

There have been claims of nepotism by the previous Pagcor administration as well as consultants, reportedly including former military and police generals, lawyers, justices, journalists, political families, doctors, architects and masseurs, being paid between PHP5,000 to PHP75,000 (up to US$1,600) monthly. The previous management recorded the most number of personnel promoted to higher positions but these have been reversed while the promotions are reviewed.

Naguiat has said that if Pagcor is privatised a gaming commission would be established on the lines of the Nevada gaming commission. Pagcor is the third biggest income-generating government agency, earning an estimated PHP30 billion (US$640 million) a year but the new government believes that if the industry is privatized the operation would be more professional and result in better profits for the government.

President Aquino commented, “If at some point in time we can do away with having government as the operator and the regulator, that will be a good direction.” It is thought that Pagcor’s dual nature as regulator and gambling promoter must be split, leaving the regulatory functions under the government. The sale of Pagcor could bring in around PHP350 million (US$7.5 million) for the government. The President is known to oppose the casinos that have been opened in areas where there are no tourists and the government is set to review Pagcor activities and the proliferation of casino operations. (E-07.19.10)

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