Melco explores strategic options for COD Manila

Despite the growing traction of the e-gaming sector in the Philippines, integrated casino resort operator Melco Resorts & Entertainment Ltd. is reassessing its operations to align with its expansion targets for the year.

The Nasdaq-listed company announced that it is exploring “potential strategic alternatives” for City of Dreams Manila while it plans its next steps in the coming months. 

Melco has engaged CBRE Capital Advisors, Inc. and Moelis & Company LLC as financial advisors to evaluate options for the 6.2-hectare luxury resort and casino complex in Parañaque’s Entertainment City.

“No decision has been made regarding any strategic alternative, and there can be no assurance that the exploration of potential strategic alternatives will result in any transaction,” the company stated, adding that it will not provide updates unless necessary.

City of Dreams Manila is operated by Melco Resorts Leisure (PHP) Corp., a subsidiary of Melco, under an agreement with local partner Premium Leisure and Amusement Inc. (PLAI). PLAI, acquired by Belle Corporation in 2011, holds a license to operate integrated resorts, including casinos.

In its latest financial report, City of Dreams Manila recorded a 19% drop in operating income from $110.14 million to $89.1 million in 2023. The average daily hotel rate also declined from $177 to $164, while revenue per available room dropped from $171 to $158.

The Philippine gaming sector is undergoing a transformation as online gambling gains popularity. The Philippine Amusement and Gaming Corporation (PAGCOR) recently announced the shutdown of unprofitable casinos and expects the e-gaming industry to reach the level of brick-and-mortar establishments in the coming years.According to PAGCOR Chairman and CEO Alejandro Tengco, the local gaming industry’s estimated gross gaming revenue is projected to reach between P450 billion and P480 billion this year, up from P410.5 billion in the previous year. TRACY CABRERA