The Philippine gaming industry

According to Industry Trends, a regular publication of the Institute for Development and Econometric Analysis, Inc. (IDEA), the recreational, cultural, and the gaming activities sector has been continuously growing for the past five years and posted a remarkable growth rate of 30 percent in 2010. The recreational, cultural, and the sporting sector covers a wide array of activities and services. In this section, along with gaming, other activities and services include TV and radio recording, broadcasting, performing arts.

As per IDEA, gambling can be found in the Arts, Entertainment, and Recreation Industry. Listed are the five business categories that fall under this industry. (1) Creative, arts, and entertainment activities (Creatives); (2) Gambling and betting activities (Gambling); (3) Sporting Activities (Sports); (4) Libraries and archives, museums, and other cultural activities (Libraries); and (5) Other amusement and recreation activities, n.e.c. (Others). In the Annual Survey of Philippine Business and Industry (ASPBI) for arts, entertainment, and recreation, only 8.5 percent of the establishments are in the gambling industry. This is just 158 establishments out of the 1,861 surveyed.

Per same published report, out of all the categories of businesses that fall under this industry, gambling employs the most number of people and it also has the highest annual average compensation for its employees 16,714 out of 41,000 (40.7 percent) people employed in the industry are earning around Php497.2 thousand annually on average. This is followed by people employed in the creative, arts, and entertainment business who earn around Php179.1 thousand annually. The industry average annual compensation is at Php286.1 thousand with only employs in the gambling business earning above average. The gaming business is the biggest spender in the industry. Gambling spent around Php15 billion in operating costs in 2010. That is more than half of the total industry expenditure at Php28.3 billion. Amusement and recreation activities comes in second for costs at a little more than half of gambling’s costs at Php7.8 billion.

Gaming may be the biggest spender but it is also the most lucrative business as well with a revenue?cost ratio of 2.8. The industry ratio is at 2.1. Gambling revenue in 2010 reached Php42 billion, 72 percent of the industry total at Php58.3 billion. The second highest earning business are those under the amusement and other recreation activities at Php9.6 billion. The value added of the entire industry is at Php35.5 billion. Php30 billion (80 percent) is from gambling.

Meanwhile, creative, arts, and entertainment has the lowest value added at only Php76.9 million (0.2 percent). Value added of each worker is also highest in the gambling business. Each worker is valued at Php1.8 million. This is followed by workers in sports activities with each person valued at around Php332.4 thousand. The industry average is at Php864.6 thousand. In all the categories mentioned above, whether it is the average annual compensation of workers, operating costs, revenue, revenue?cost ratio, value added, and value added for each worker, it is evident that it is only the gaming business that has figures that are way above average values and that the values in the gaming greatly pull up industry averages according to the researchers of IDEA.

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