After suffering massive profit losses due to COVID-19, Metro Manila in the Philippines finally has some good news. The capital is set to ease off some of its restrictions and the spokesperson for President Rodrigo Duterte, Harry Roque, states that the general community quarantine will be in effect only until July 31. Casinos are affected, as they are in the quarantine area.
It’s not just Manila that will breathe a little easier. All of the Philippines will be under quarantine until the end of the month. But, the restrictions and the type of quarantine will depend on each region’s current COVID-19 situation. The better the areas deal with the pandemic, the lesser the restrictions will be.
The Effect on the Casinos
At the end of May, the Philippine Amusement and Gaming Corp (PAGCOR) stated that casinos will be able to open their doors and accept patrons, but just as the regulations at most countries around the world, their capacity will be limited. Private and public casinos were ordered to close shop in late March because the pandemic has caused a lot of problems and the government had to enforce a quarantine.
That decision had a massive impact on casinos and their gross gaming revenue (GGR), meaning that a lot of resorts suffered profit losses. The Okada Manila casino, for example, had a Q2 profit of a total of $52.1 million, or just over PHP2.6 billion. While these are solid numbers, they are way lower compared to Q2 in 2020. To be more precise, they are 49% down.
What’s even more interesting is that June had a total GGR of PHP1.4 billion ($27.818M), which contributes to 55% of the total Q2 GGR of this resort.
Changes are Likely to Take Place
In the recent period, President Duterte has been lobbying and been pressuring lawmakers to pass the latest regulation that will regulate offshore online casinos and apply taxes on their income.
The reason why he is so keen on taxing offshore online casinos is that the Philippines currently has a massive debt. It exceeds $510 billion and the government currently has no plan on how to lower it. 72% of that debt belongs to domestic borrowings, while 28% to foreign sources.
Now, the fact that casinos are slowly reopening is a good sign, as they generate a lot of money and they help return some of that debt, but it is not enough. The President thinks that, due to the fact that online casinos have become so popular in the past couple of years, applying taxes will be of massive benefit. The proposed legislation states that there will be a 5% GGR tax and 25% income tax for foreign employees.