After firing the entire management and board of directors of a government agency that leased land for a $1.5-billion casino project, President Duterte ruled out the operation of new casinos during his term, saying he had an aversion to gambling.

His order to the Department of Justice (DOJ) to review the “flawed” contract between Nayong Pilipino Foundation (NPF) and Chinese casino operator, Landing Resorts Philippines Development Corp., is geared to possibly scrapping the deal, presidential spokesperson Harry Roque said on Thursday.

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The Philippines is one of Asia’s fastest-growing gambling markets and its integrated casino-resorts have helped create jobs and generate tax and tourism revenue. It also benefits from bans on gambling in many Southeast Asian nations.

“I hate gambling. I do not want it,” Mr. Duterte said during a speech at the Philippine National Police anniversary rites on Wednesday.

“There will be no casinos outside of what are existing. I am not granting anything,” he stressed.

Directive to Pagcor

President Duterte ordered state-owned Philippine Amusement and Gaming Corp. (Pagcor) in January to stop accepting new applications in a bid to prevent overcrowding in the sector and manage its growth.

At the end of last year, there were nine private casino companies in the Philippines operating 1,444 gaming tables and 9,427 electronic gaming machines, according to government data.

Gross gaming revenues rose 11.6 percent to P176.5 billion ($3.33 billion) last year.

Since the halt in new applications, two foreign companies—Macau’s Galaxy Entertainment Group and Landing, a subsidiary of Hong Kong’s Landing International Development Ltd.— have secured provisional gaming licenses.

Review of contract

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President Duterte on Tuesday ordered a review of Landing’s contract on the same day he fired the NPF directors as they were breaking ground on the project.

He said the contract put the government at a disadvantage because the rental payment was too cheap and the lease too long.

“So when the President says it is flawed, obviously the order to review is toward possibly putting an end to the contract. But he has asked the DOJ secretary to do this,” Roque said.

Justice Secretary Menardo Guevarra said the lease contract was still valid but the reevaluation and the appointment of new NPF officials could affect the planned casino-resort on part of a reclaimed land in Parañaque City.

Guevarra said he directed the Office of the Government Corporate Counsel and his staff to submit their reports “as soon as possible.”

The President had cited the “ridiculously long” lease period of 70 years, which was later reduced to 50 and then to 25. However, “the rental payment was still unconscionable,” according to Roque.

Nayong Pilipino approval

The NPF approved Landing’s proposal of a monthly lease of P150 per square meter, or P14.358 million a month for the 95,724-sq-m property for 50 years, or P172.303 million yearly, with an option to renew for 25 years, according to a Commission on Audit memo.

In a statement, NPF chair Patricia Yvette Ocampo said the lease term was for 25 years—not 70 years. This was reaffirmed by Landing International.

Monthly rentals were pegged at P360 per sq m, and the advance rental amount was placed at P827.05 million, Ocampo said.

On top of this, the NPF was to receive an additional monthly rental equivalent to 10 percent of net profits from the operations of its attractions and theme parks after taxes, exclusive of the value-added tax.

“We negotiated what we believed then, and believe now, are most advantageous terms and conditions for the government and the people,” Ocampo said.

In a statement, Landing International said the decision to replace the top NPF officials “did not affect the validity of the subject contract of lease.”

Landing said it was granted a provisional license by Pagcor to operate a casino in 2022 — once the 10-year moratorium on new casinos at Entertainment City ends — provided that it complies with all the requirements of the law and existing regulations. —WITH REPORTS FROM JULIE M. AURELIO AND DONA Z. PAZZIBUGAN

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