Pagcor ‘excesses’ hit - Tuesday 12th of April 2005

SEN. Jinggoy Estrada charged Monday that the Philippine Amusement and Gaming Corp. (Pagcor) paid the Hyatt Marina Hotel Casino about P489 million for “rent expense” in its first 12 months of operation, or more than half of the rent paid by Pagcor in its 13 other wholly-owned casinos.

In a privileged speech Estrada said Pagcor did not record the “rent” in its financial books.

“The rent, if they wish to call it [that], is excessive, and is becoming more excessive every day because it is fixed at 40 percent of the winnings of the entire casino,” he added.

He alleged that Pagcor’s contract with Hyatt was “more anomalous” than its contract with 15 operators of slot-machine arcades. In the latter contract, Pagcor “gives away” 40 percent of the slot-machine earnings with the operators.

“But at Hyatt, even the earnings from the table games are included in the 60-40 sharing,” he said.

He questioned why Pagcor officials allow this when the Hyatt operation competes directly with the casinos fully owned by Pagcor.

“It cannibalizes Pagcor’s own market!” Estrada exclaimed.

He also alleged that Pagcor had “illegally” extended the exemption it enjoys from customs duties to the owners of the hotel “by misrepresenting that the importations made by Hyatt are those of Pagcor’s.”

Estrada also linked the Macau casino “king” Stanley Ho to the Hyatt Marina Hotel, a subsidiary of the Chow Tai Fook group of companies of Hong Kong.

He said the Hong Kong company is controlled by Henry Cheng, whom he described as an “old partner’ of Stanley Ho in many companies, “including casinos in Macau.”

He asked the Senate to investigate the “true ownership” of the company contracted by Pagcor to determine if Ho has taken a big chunk of casino operations in the country.

He alleged that Pagcor has been “grossly mismanaged, abused and bled by the people that Mrs. Arroyo had appointed to oversee its operations. He asserted that because of these “anomalies,” Pagcor’s revenue has continually gone down even as the government is asking the legislature to enact more revenue measures.

“I cannot think of any government agency that can match this record, especially at a time when this government is pontificating [on] the need [to adopt] austerity measures and avoid extravagant wastage of previous resources,” Estrada said

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