Gaming stocks battered due to BIR ruling on corporate income tax

MANILA, Philippines - Gaming stocks were battered yesterday on the back of knee-jerk reactions from an operational problem in one of newest and major casino operators in the country and a regulation on corporate income taxes of these firms.

Second most-traded stock Melco Crown Philippines Resorts Corp. lost 4.96 percent or seven centavos to P13.40 while Resorts World Manila owner Alliance Global Group Inc. lost 3.6 percent or 90 centavos to P24.10.

Solaire Resort and Casino owner Bloomberry Resorts Corp. plunged 5.35 percent or 68 centavos to P12.02 while Belle Corp. of the SM conglomerate sank 4.56 percent or 32 centavos to P6.69.

“Gaming companies led yesterady’s decliners after the Bureau of Internal Revenue released a memorandum stating that Pagcor and its casino licensees are subject to the 30 percent income tax,” RCBC Securities Inc. said.

“The income tax to which the licenses will be subject to will come on top of the franchise fees being charged by Pagcor,” it added.

For Jomar B. Lacson, head of research at Campus, Lanuza & Co., Inc., said investors might have reacted negatively with the flooding in the Solaire Resort and Casino last week.

“We will really see how strong any new construction like casino, hotel and condominiums are particularly this coming rainy season,” Lacson said.

The STAR earlier reported that during the heavy downpour in Manila, water leaked from the ceiling of the newly opened $1.2-billion Solaire Resort and Casino and flooded its slot machine area before dawn on Saturday.

Casino staff closed down the right wing of the casino as water poured from the ceiling and soaked several slot machines. A few minutes after the leak that lasted for about 15 to 20 minutes, all the toilets near the area reportedly malfunctioned.

With its grand opening last March 16, Solaire is the first to occupy the so-called Entertainment City, the Philippines’ answer to the Las Vegas, Singapore and Macau gaming hubs. The Entertainment City is a 120-hectare property reclaimed from Manila Bay and owned by the Philippine Amusement and Gaming Corp.

The resort and casino is run by the Bloomberry of port magnate Enrique Razon Jr. under a five-year contract. Solaire is managed by US-based Global Gaming Asset Management which owns a nine percent stake in the project.

Alliance Global and Melco owns gaming licenses for Entertainment City. Alliance Global is behind the $1.1-billion Resorts World Bayshore, while Belle and Melco are the companies putting up the $1.3-billion Belle Grande Manila.