Philippines state-owned Amusement and Gaming Corporation (PAGCOR) registered a significant drop in its first quarter 2022 earnings from gaming operations to PHP11.29 billion ($225.8 million), reported Asian gaming specialist media Inside Asian Gaming.
Q1 2022 Generated One Third of Q4 2021
The regulator’s income for the three months ended March 31, 2022, represented an increase of 35.05% on its first quarter 2021 reading but only a third of the PHP32.63 billion ($652.6 million) PAGCOR registered from gaming operations in the fourth quarter of 2021.
The sequential slump in income comes after the latest round of capacity restrictions imposed on gambling operations by the Philippines government at the start of the year to tackle the spread of the latest coronavirus variant. The government has eased these restrictions and re-opened its borders since the beginning of March but their impact is now seen in PAGCOR’s quarterly earnings report.
Compared to the first three months of 2021, PAGCOR accounted for a 53.9% increase in expenses to PHP5.07 billion ($101.4 million), yet somehow managed to acquire a net profit of PHP624.7 million ($12.5 million), a mammoth 310% increase on its Q1 2021 reading. On a sequential basis, Q1 2022 profit was up 206% on the PHP203.6 ($4.1 million) PAGCOR accounted for in the fourth quarter of 2021.
Optimism or Delusion
The first quarter 2022 result is in contrast to expectations at PAGCOR voiced late last month by its chair and chief executive officer Andrea Domingo, who boldly stated at the Kapihan sa Manila Bay virtual forum that the gaming industry would see a double-up in revenue in 2022, despite the decreasing number of incumbents.
Within a single week, a total of 22 Philippine Offshore Gaming Operators (POGOs) were shut down, having lost their operating licenses for various reasons, including failure to complete their obligatory registration with the country’s Anti-Money Laundering Council after PAGCOR implemented a more conservative approach to issuing POGO licenses.
Domingo predicted revenue of between PHP25 billion ($500 million) and PHP30 billion ($600 million) by the end of June, and between PHP60 billion ($1.2 billion) and PHP65 billion ($1.3 billion) for the entire 2022. Domingo’s half-year conservative prediction equates to PHP12.5 billion ($250 million) for Q1 and fell short of the actual reading by PHP1.21 billion ($24.2 million).
PAGCOR also predicted the number of POGO operators was very unlikely to increase in the near future, as for that to happen, the Philippines should first experience a return in the consumer interest to travel to the country.