Manila mogul to shake up casino market

Business Asia, August 2, 1999

Shares of tycoon William Gatchalian's holding firm Wellex Industries have surged on reports that he is looking into buying more hotels and putting up casinos in the Philippines.

Wellex share prices gained 7.14 per cent recently.

Hotel firm Waterfront Philippines, in which Gatchalian has a 40 per cent stake, rose 1.09 per cent to 4.65 pesos and was one of the most actively traded issues with about 91 million pesos in trades.

"Waterfront is also with casinos and hotels. There's been reports that Gatchalian is looking into acquiring more hotels and putting up casinos in there," said Jose Ma Ricardo Garcia, executive vice-president at Diversified Securities.

Traders said Gatchalian, said to be a close friend of President Joseph Estrada, was not likely to encounter opposition against his gaming ventures.

"He's basically a guy who has re-invented himself into a casino, gaming, hotel and leisure resorts tycoon," one trader said.

Wellex also has a majority stake in Air Philippines, one of the Country's new airlines.

"What you're having is basically a lot of things with synergy," the trader said.

Manila newspapers reported recently that Gatchalian was planning to acquire hotels that would add to Waterfront's current line-up of two casino hotels in Cebu, central Philippines.

Meanwhile, the Philippines' Supreme Court has ordered a state-owned gambling firm to reply to a suit that seeks to halt the operations of a controversial game.

However, the court declined to issue a temporary restraining order on gambling operations based on jai-alai, a handball game that originated in the Basque region.

Instead, the court ordered the Philippine Amusement and Gaming Corp (Pagcor) to refute a petition filed by two congressmen who said Pagcor was not authorised by its charter to conduct jai-alai operations.

Pagcor entered into a joint venture with Belle Corp and Filipinas Gaming Entertainment Totalisator (Filgame) to resume the game banned since 1986. The jai alai operations re-opened on June 22.

Pagcor estimates annual revenues of 1.5 billion pesos from the operations of the game and associated betting.

The congressmen said a. favourable ruling on the case would give Pagcor the go signal to claim franchise on all other forms of illegal gambling in the country.

Jai alai has long been popular in the Philippines but was banned in 1986 after a game-fixing scandal.

An attempt to resurrect the game was made in 1994, but the Supreme Court banned it on the grounds that gambling was against the national interest and that it had to be franchised only by the national government.

- Reuters