x Abu Dhabi, UAEWednesday 26 July 2017

Billionaires join forces to build $2bn Manila resort

The Filipino billionaire John Gokongwei will become a partner of the Japanese pachinko magnate Kazuo Okada to build a more than US$2 billion Manila casino resort.

The billionaire John Gokongwei will become a partner of the Japanese pachinko magnate Kazuo Okada to build a more than US$2 billion (Dh7.34bn) Manila casino resort.

Robinsons Land, controlled by Mr Gokongwei, signed a preliminary agreement with Okada's Universal Entertainment Group for the project, which would be the biggest such investment in the Philippines, the companies said separately yesterday.

However, Grant Govertsen at Union Gaming Group said there was concern over the appetite for such a large number of casinos in the South East Asia nation. "It can hardly support two integrated resorts," said Mr Govertsen.

"We'd doubt if these companies will be able to generate a meaningful return for their investment."

Universal, which makes the pinball-like machines used in pachinko parlours where customers play for prizes, said in September last year it would invest $2.3bn in the project. This figure "stands for now" and details and exact amount will be known next month when a final agreement is reached, the Universal spokesman Nobuyuki Horiuchi said yesterday. Frederick Go, the Robinsons Land president, could not immediately provide a project cost.

The final contract will be signed by January 31, Universal said.

The resort complex will also have luxurious hotels, restaurants, commercial facilities, a budget hotel, residences and "Vegas-style water fountains and an enormous indoor pool with real sand beach covered by a huge glass dome", Universal said.

Robinsons Land will be in charge of the development of commercial facilities and budget hotels and housing facilities for the project, Universal said.

Mr Okada and former partner Steve Wynn, the chairman of Wynn Resorts, are feuding over accusations of bribery. Mr Okada cannot open a casino in Manila if bribery accusations against him are proven, Cristino Naguiat, chairman of Philippine Amusement & Gaming Corporation, said on Monday.

The Philippine justice department is investigating bribery allegations against Mr Okada, Edwin Lacierda, the presidential spokesman, said last month.

Mr Gokongwei would have weighed the risks for forging a partnership with Mr Okada, said Richard Laneda, an analyst at Col Financial Group in Manila.

"Gokongwei group is known to be very conservative and they don't make investments without weighing the risk," he said.

If the licence is cancelled later "then the Gokongwei group can bid for it or negotiate with whoever gets [it]", Mr Laneda added.

As part of the agreement, Robinsons Land will acquire majority of Eagle I Land Holdings, which owns 30 hectares in the government's Pagcor Entertainment City project and purchase a minority stake in Tiger Resorts, Leisure and Entertainment, which owns the licence to develop and manage a casino resort in the complex, according to Universal and Robinsons Land.

* Bloomberg News