House Speaker Belmonte not supportive of new investigation on PAGCOR; calls for support for entertainment city project instead

Press Release
April 1, 2012

MANILA  –  Congressmen led by House Speaker Feliciano Belmonte are no longer keen on investigating anew the officials of the Philippine Amusement and Gaming Corporation (Pagcor) who got caught up in a fierce intra-corporate legal war between two gaming giants in the US.

Meanwhile, Speaker Belmonte and other senior members of Congress said that instead of being subjected to unending investigations, Pagcor Chair Cristino Naguiat Jr. deserves to be supported for doggedly pursuing the US$ 5-billion Entertainment City project, which got him and other Pagcor officials into trouble in the first place.

“As far as I can remember, the committee on games and amusement had a hearing and no less than the panel chair (Manila Rep. Amado Bagatsing), together with his members, cleared Chairman Naguiat. If ever the resolution seeking another probe reaches committee chair Amado Bagatsing, I’m sure he knows what to do,” Belmonte said.

Belmonte was commenting on a fresh investigation sought by Bayan Muna party-list Rep. Teddy Casiño on reports that Naguiat and other Pagcor officials got luxury rooms, sumptuous dinners and other perks at the Wynn’s Resorts in Macau in 2010, courtesy of Japanese casino mogul Kazuo Okada.

Although Casiño’s resolution asked the House committee on good government and public accountability to do the investigation, the matter is likely to be tossed back to Bagatsing’s committee.

When sought for comment, Bagatsing described Casino’s resolution as similar to “forum shopping” in the legal practice. Forum shopping is the informal name given to the practice adopted by some litigants to have their legal case heard in the court thought most likely to provide a favorable judgment. The practice is disallowed in the Philippine Justice system.

“It indeed looks like forum shopping to me,” said Bagatsing, whose panel cleared Naguiat and his Pagcor delegation of supposed impropriety, saying that Pagcor officials were mere cannon fodder in the messy corporate legal wrangling between Okada and his partner of 12 years, American casino magnate Stephen Wynn, chair of the Wynn Resorts.

“There is no impropriety here. We are falling into the trap and machinations of Mr. Steve Wynn whose main objective is to oust Okada from his casino firm,” Bagatsing said during the February 27 hearing where Wynn was also declared persona non-grata and banned from doing business in the country.

According to Bagatsing, Naguiat was merely working to ensure the success of Entertainment City which could generate $10 billion in gross revenues from 2015 and 2016 when investors led by Okada’s Travellers International Hotel Group and Tiger Resorts and local investors shall have completed the integrated hotel, amusement and gaming project in Paranaque City.

“I hope we will get the picture right, that Mr. Naguiat was a collateral damage,” said Bagatsing, adding that the project that Okada is entering with Pagcor in the country may dwarf the gambling operations in Wynn’s casinos in Las Vegas and Macau.

During the hearing, Naguiat said he was only doing his job when he honored the invitation of Okada in a bid to create more jobs in the country.

True to Bagatsing’s suspicions, Wynn did indeed oust Okada from the Wynn Resorts board by redeeming Okada’s 24 shares in the company at 30 percent discount and issuing a 10-year $1.9-billion promissory note. Wynn did so by presenting to the board an investigation showing Okada committing alleged impropriety with gaming regulators in the Philippines in violation of US anti-corruption laws.

But Belmonte said that instead of letting the Wynn-Okada messy legal corporate battle affect the country’s chance to become the world’s newest gaming and tourism mecca, Naguiat should be supported for pursuing the ambitious multi-billion project.

“I am supportive of Pagcor’s Entertainment City project.  It will definitely boost our country’s tourism,” Belmonte said, noting that Tourism Secretary Ramon Jimenez earlier expressed optimism that Pagcor’s Las Vegas-style facility would help the government achieve its targeted 10 million annual tourist visits by 2016.

Once it becomes fully operational by 2015, Pagcor’s Entertainment City is expected to generate at least 1,000,000 tourist arrivals annually contributing at least 10 percent of the government’s target tourist arrivals within the next few years, with annual gaming revenues estimated to be at least US$10 billion of which 25 percent, or at least US$ 2.5 billion annually, will be the share of government.

“This will bring much more fun in the Philippines, in terms of tourist arrivals and gaming revenues for the Philippine government,” Belmonte said.

Okada, chairman of Universal Entertainment Corp. and Aruze USA Inc., had likewise filed a counterclaim against his partner Wynn for Okada’s ouster and the arbitrary redemption of his stake in the Las Vegas-based gaming firm.

Okada sought permanent injunction, declaratory relief and multiple claims for damages caused by the actions of Wynn and the Wynn Resorts Board for the alleged “unjust and improper redemption of shares owned by Aruze at a 30 percent discount.”