Philippine Gambling Resort Company Changes Mind About Delisting on the Stock Exchange
It has been a difficult couple of years for the Philippine gaming industry. Casinos are particularly feeling the heat since the election of President Rodrigo Duterte in 2016. Duterte has stated that he wants to eliminate any new casinos from building in the Philippines. He also has vowed to stamp out illegal gambling and drug use by Filipinos. In addition, Duterte has vowed to use the death penalty for drug dealers and illegal gambling bosses. This crackdown on gambling may be the reason Melco Resorts was looking to delist from the Philippine Stock Exchange.
The Pervasiveness of Gambling in the Philippines
Gambling in the Philippines has been a part of the Filipino culture since the 16th century. It is widespread all over the islands in both legal and illegal forms. Gambling is rampant in the country. There are 20 casinos in Manila alone. The Chinese introduced some forms of gambling to the islands. Cockfighting has been popular in the country as far back as the 14th century. With the Spanish occupation, the Philippines got casino gaming and horse racing. Cockfighting remained popular throughout the country. When the Americans tried to ban gambling, they quickly realized it was an abject failure.
Today, gambling is pervasive in the country. There are sweepstakes and lottery games that raise money for health and welfare programs in the country. Winners of the games receive cash prizes. Casinos are all over the islands, and the country allows online gaming. People can gamble on horse racing and cockfighting remains popular.
Founded in 1910 as an electric company, Melco International is one of the oldest companies in Hong Kong. Its holdings include properties in gambling, leisure, technology, entertainment, and land in Hong Kong, Macau, and the Philippines. Its primary focus is on gambling. The company’s owner is the son of the prominent Ho family of Hong Kong and Macau.
The company owns several notable properties. With Crown Resorts Ltd., the company owns Studio City in Macau. The company is also opening the City of Dreams casino on the Cotai Strip, as well as in Manila.
Melco Resorts & Entertainment, in protest over Duterte’s crackdown on new gambling licenses, has threatened to take the company private. Since his inauguration, Duterte has refused to grant new casino licenses. He views gambling as a vice. And, he needs to eradicate it because it takes money out of the pockets of the poor. Duterte’s stance on gambling is nothing new. He had the same stance when he was mayor of Davao City.
However, Melco has changed its mind about delisting from the Philippine Stock Exchange. The reason, economists said, is the company would have to buy back 95 percent of its stock to go private.
The company, instead, has decided to do a voluntary tender offer for 1.6 billion publicly owned and common shares. Economists have said the tender offer may be because the company may decide to go private in the future. Melco originally wanted to start the process for delisting in October. However, the company is now saying it wants to wait until at least the first quarter of 2019.
Melco’s anger at the Philippine government is symbolic of the general anger directed at Duterte’s government in general. The company feels the government is trying to drive legal gambling enterprises out. Doing so, it says, will allow illegal gambling enterprises to thrive. Also, businesses have noted if Duterte drives out legal casinos, criminals will have a place to launder drug money. It will be interesting to see if the company decides to open new properties in the country. Melco may choose to take its business elsewhere.
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Grayson met Thomas Winston at university and has stayed in touch ever since. Now living and working in America as a logistics specialist, Grayson has long shared Thomas’ love of real money online casino games but prefers roulette and craps to blackjack. She signed on readily as a contributor when Thomas told her he was planning to launch the Top Casino Picks site to share her experience, tips and tricks, when it comes to real money online casinos.
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