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Friday, Sep 26, 2014

Business

Universal expects one-year delay in launch of $2.5b Manila casino-resort

Reuters | Friday, Sep 26, 2014

Japanese billionaire Kazuo Okada

MANILA - The Philippine affiliate of Japan's Universal Entertainment Corp, controlled by billionaire gaming magnate Kazuo Okada, said it expected to open its US$2 billion (S$2.5 billion) casino-resort project along Manila Bay in 2016, a year later than planned.

The Universal-affiliated company, Tiger Resorts Leisure and Entertainment Inc, holds one of four licenses to operate a casino complex in Entertainment City, the Philippines' answer to gaming hubs in Las Vegas and Macau. Development of Okada's Manila Bay Resorts began in 2012.

Tiger expects to launch the first phase of the casino-resort only in late 2016, Adrian Ort, general manager for hotel and food and beverage operations at Tiger, said earlier this week. He declined to give specific reasons for the delay.

But regulators say that even if the project is finished and ready, it cannot start operations if it does not get a local partner to address land ownership restrictions that it is currently in violation of. "We've told them as early as 2012 that we won't give them the notice to commence operations until they settle the land ownership issue," Francis Hernando, the gaming regulator's vice president for licensed casino development, said in a phone interview late on Thursday.

The Philippine constitution bars foreign entities from owning more than 40 per cent of land. In 2012, an arm of the Philippine justice department published a legal opinion indicating the Okada group had breached the constitution.

It said Aruze USA, a US firm controlled by Okada, effectively held 64 per cent direct and indirect shares in Eagle I Landholdings Inc, the registered owner of the 44-hectare lot where the casino-resort project is being built.

The Okada group has since approached local firms Empire East Land Holdings Inc, Robinsons Land Corp and Century Properties Group Inc for a partnership. But negotiations have persistently run into snags due to disagreement over terms.

A Robinsons Land official said it is no longer in talks with Tiger, while Century Properties has yet to return to the negotiating table, its spokesperson said.

Century had taken Universal to court after the Japanese group terminated a deal with the Philippine firm to build luxury residential and retail projects within the casino-resort complex. But Century is open to an out-of-court settlement.

"The chairman is talking to a lot of people who are interested. I'm sure they'll bring value to the project but we just have to find the right mix," said Matt Hurst, executive vice president for casino operations and marketing at Tiger.

Tiger plans to kick off the first phase of the project with the launch of two hotels with a total of 1,000 rooms and a casino with 500 gaming tables and 3,000 slot machines, company officials said.

Three other groups hold licenses to operate in Entertainment City.

The joint venture of local firm Belle Corp and Melco Crown Entertainment Ltd is expected to open the City of Dreams Manila casino-resort this year, a project worth over $1 billion.

Alliance Global Group Inc and Genting Hong Kong Ltd , partners in casino-hotel firm Travellers International Hotel Group Inc, expect to complete their casino-resort project in Entertainment City by 2017.

Bloomberry Resorts Corp opened the first phase of its $1.2 billion casino-resort last year.

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