Casino Filipino sale may cut health funding by $34M yearly: Report
The Philippine government’s plan to privatise Casino Filipino as part of the Philippine Amusement and Gaming Corporation’s (PAGCOR) long-awaited restructuring could reduce funding for the country’s Universal Health Care (UHC) programme by up to PHP2.1 billion ($34 million) annually, according to a new legal analysis.
According to a report published by Geronimo Law, separating PAGCOR’s regulatory and operating functions may address governance concerns, but it would also weaken one of the country’s recurring funding sources for the Philippine Health Insurance Corporation (PhilHealth) unless lawmakers introduce replacement mechanisms.
The findings come days after PAGCOR Chairman and CEO Alejandro Tengco told local media that the proposed “decoupling” is expected to advance before the end of 2026, with the Governance Commission for GOCCs (GCG) set to submit its recommendation to the Office of the President before an Executive Order paves the way for the government’s exit from casino operations.
Casino Filipino contributes directly to UHC
Under existing law, PAGCOR pays a five per cent franchise tax on gross gaming revenue and remits 50 per cent of its gross earnings to the National Government. The Universal Health Care Act then earmarks half of the National Government’s PAGCOR share for PhilHealth.
Geronimo Law explains that this translates into an effective National Government contribution of 47.5 centavos for every peso of gross gaming revenue, with half ultimately supporting UHC. Applying the statutory funding formula, Geronimo Law estimates Casino Filipino contributed approximately PHP3.02 billion ($48.9 million) to UHC in 2024 and PHP2.47 billion ($40 million) in 2025.
The analysis notes that because the UHC allocation is calculated from gross rather than net gaming earnings, even unprofitable branches continue contributing.
Funding falls after privatisation
Geronimo Law argues that once Casino Filipino properties are sold, PAGCOR will become solely a regulator collecting licence fees instead of directly operating casinos. Although those licence fees would still form part of PAGCOR’s gaming income, the UHC allocation would be based only on licence fees rather than the full casino revenues generated by privately operated properties.
Using current licence fee benchmarks, Geronimo Law estimates annual UHC receipts from former Casino Filipino operations would fall sharply. At a 30 per cent licence fee, similar to the current e-games rate, the law firm said that annual UHC funding would decline to about PHP740 million ($11.9 million), leaving an annual funding gap of approximately PHP1.73 billion ($28 million) based on 2025 revenues.
At lower licence fee assumptions, the gap widens. “We estimate a recurring loss to universal healthcare of about PHP1.7 billion ($27.5 million) per year to PHP2.1 billion ($34 million) post-privatisation,” Geronimo Law said. It further estimates that over the remaining life of PAGCOR’s franchise until July 2033, the cumulative undiscounted reduction in UHC funding could exceed PHP12 billion ($192.3 million).
Sale proceeds will not fund PhilHealth
PAGCOR Chairman has previously estimated the sale of Casino Filipino assets could generate between PHP30 billion ($485.7 million) and PHP50 billion ($809.5 million). However, Geronimo Law argues that those proceeds would not replace the recurring healthcare funding currently generated by casino operations.
“Proceeds from the disposal of branch assets and licenses are not franchise gaming earnings and thus never enter the base on which the UHC share is based,” the firm said.
Regulatory benefits remain
Despite warning about reduced healthcare funding, the report acknowledges that privatisation may still achieve its primary policy objective of eliminating PAGCOR‘s long-criticised dual role as both casino operator and regulator. That conflict of interest has long been cited by policymakers and industry observers as justification for restructuring the state gaming regulator.
“Privatisation may be defensible on regulatory grounds (the conflict in PAGCOR’s dual role as operator and regulator) and on fiscal efficiency grounds (shedding branch operating expenses),” the firm said. However, it cautions that policymakers should also recognise the measurable fiscal trade-off for public healthcare.
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