Duterte's Surprise Casino Calls Bring Risk to Gaming Plans
(Bloomberg) -- Hong Kong-based Galaxy Entertainment Group and Landing International Development Ltd. are finding out how unpredictable Philippine President Rodrigo Duterte’s policies can get for their casino plans.
Duterte ordered a review of Landing’s lease contract for a $1.5 billion casino on Tuesday, the day the Hong Kong-listed company is breaking ground on the project. Last week, gaming officials said Galaxy’s $500 million casino plan can’t proceed in Boracay because Duterte said so. Both have gaming permits from the Philippine Amusement & Gaming Corp.
Landing fell 4.3 percent as of 2:15 p.m. in Hong Kong on Wednesday, after rising as much as 3.6 percent on Tuesday. Galaxy fell the most in a month on Aug. 2 after the gaming agency thwarted its Boracay plan, echoing comments made by Duterte’s spokesman on July 30. Galaxy’s local partner Leisure & Resorts World Corp. dropped the most in five weeks on July 31.
Duterte instructed the Department of Justice to review Landing’s lease contract the president called “flawed,” according to his spokesman Harry Roque. Duterte found a 75-year contract as a “ridiculous long period of time,” prompting him to fire on Tuesday officials of the Nayong Pilipino Foundation Inc., which leased some 10 hectares to Landing.
“Unless the lease contract is canceled or nullified on solid legal grounds by the courts, Landing has reason to believe that it is a valid leaseholder and can legally proceed with the project,” Landing said in an Aug. 7 statement. Its original lease pact was for 50 years renewable for 25 years and was later revised to 25 years, the gaming regulator said.
At Tuesday’s groundbreaking and before the surprise policy reversal, Landing Chief Operating Office Jay Lee said company officials had met Duterte who welcomed their investment. Lee also said at the time they see no uncertainty in the Philippine gaming sector.
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