Share prices of gaming stocks plunged Tuesday, after President Rodrigo Duterte rejected plans to build casinos on the resort island of Boracay.
Leisure & Resorts World Corp. which teamed up with Macau-based Galaxy Entertainment Group Limited to build a $550-million world-class beach resort and casino in Boracay fell 10.1 percent to close at P5.35. LRWC warrants also declined 12.8 percent to P3.40.
Analysts said with the planned development facing strong opposition from various sectors, share price of LRWC would likely continue to go down unless some clarification was made regarding Duterte’s pronouncement.
Duterte’s negative comments on the proliferation of casinos in the country also hurt other gaming stocks like Bloomberry Resorts Corp. and Premium Leisure Corp.
Bloomberry dropped 3 percent on Tuesday to P13.10 while PLC declined 0.9 percent to P1.05.
“Negative sentiments on casino operations in Boracay spilled over to other gaming stocks on uncertainty that casino operations as a whole will be out under scrutiny,” Papa Securities said.
Duterte said Monday no casinos would be built in Boracay, one of the top tourist destinations in the country. State-run Philippine Amusement and Gaming Corp. earlier issued a provisional license to Galaxy Entertainment and LRWC for the $550-million casino resort on the island.
Pagcor chair and chief executive Andrea Domingo said the awarding of the provisional license would enable the project proponents to jumpstart the process of securing all necessary permits and clearances prior to the construction of the planned casino.
GEG and LRWC earlier said the planned Boracay facility would not be a “mega casino” but an integrated resort development targeting Asian families.
Under the plan, the bulk of the gross floor area would be allocated for premium hotel rooms and other amenities like wellness centers, bars, lounges and fine dining restaurants.
Only 7.5 percent of the project total gross floor area would be dedicated as casino and gaming area.
Based on the project’s timetable, construction would take at least three years, with operations expected to commence soon after or as early as 2021.