PAGCOR’s Privatisation of Casino Filipino Would Reduce Universal Health Care Funding, Say Experts

The Philippine government’s plan to privatize Casino Filipino, the state-run casino brand operated by the Philippine Amusement and Gaming Corporation (PAGCOR), could carve a lasting hole in the country’s Universal Health Care (UHC) program. A new legal analysis from Manila-based Geronimo Law estimates the shift will cost the healthcare fund between P1.7 billion and P2.1 billion every year going forward.

The warning lands as PAGCOR pushes ahead with its long-planned transition away from directly operating casinos and toward a purely regulatory role. The agency has floated selling roughly 40 Casino Filipino branches to private operators, a deal Chairman and CEO Alejandro Tengco has previously projected could generate P30 billion to P50 billion in upfront proceeds for the national government.

Why the Windfall Won’t Reach Healthcare

The core problem, according to Geronimo Law, is how Philippine law defines the money that flows to PhilHealth. Under the Universal Health Care Act, half of the national government’s share of PAGCOR’s gaming income is earmarked for the Philippine Health Insurance Corporation. That provision applies specifically to “franchise gaming earnings” — the ongoing revenue PAGCOR collects from actually running casino floors.

The one-time sale price for the Casino Filipino branches doesn’t qualify. “The P30 billion to P50 billion purchase price will not go to UHC,” the firm said in its commentary, noting that proceeds from disposing of branch assets and licenses fall outside the statutory base used to calculate PhilHealth’s share. Those funds are instead expected to be remitted to the national government as general dividends, with no earmark for healthcare.

Once the sale closes, PAGCOR will stop collecting direct gaming revenue from those branches altogether. It will instead earn only license fees from the private operators who take over — a much thinner revenue stream than what the agency currently books from running the casinos itself.

The Scale of the Shortfall

Geronimo Law’s projections are grounded in Casino Filipino’s recent performance. The brand’s gaming revenue delivered an estimated P3.02 billion to the UHC fund in 2024 and P2.47 billion in 2025. Based on those figures, the firm calculated that privatization would strip out P1.7 billion to P2.1 billion in annual UHC funding going forward, with some estimates running as high as P2.3 billion in the steepest scenario.

Closing that gap through license fees alone would require an implausible surge in performance from the newly privatized branches. “For UHC to be made whole through license fees alone, privatized branches would have to more than triple their gross gaming revenues,” Geronimo Law wrote — a bar the firm suggests is unrealistic given current market conditions.

The stakes are compounded by an existing backlog: PhilHealth has reportedly accumulated approximately P106 billion in unremitted UHC receivables dating back to 2019, meaning the program was already running behind on collections before this new structural loss even takes effect.

What Happens Next

PAGCOR has been signaling its intent to fully exit casino operations for years, arguing that separating its role as an operator from its role as regulator resolves a longstanding conflict of interest. The agency wants to function strictly as a licensing and oversight body, collecting fees from private casino operators rather than competing with them directly.

The privatization proposal is currently under review by the Governance Commission for Government-Owned and -Controlled Corporations (GCG), which is expected to submit its recommendation to the Office of the President by the third quarter of 2026. That timeline puts a decision on the horizon even as the healthcare funding question remains unresolved.

Geronimo Law’s analysis doesn’t argue against privatization outright, acknowledging that decoupling PAGCOR’s regulatory and commercial functions is a legitimate policy goal. But the firm’s bottom line is stark: absent a legislative fix that redirects some portion of the sale proceeds or restructures the license-fee formula, the Philippines’ Universal Health Care program stands to lose a meaningful, recurring funding source at a time when it can least afford it.

The debate also highlights a tension familiar to regulators well beyond Manila. Governments that lean on gaming revenue to fund public programs face a structural risk whenever ownership models shift from state-run operations to privately licensed ones — the fee-based income that replaces direct earnings rarely scales at the same pace. For a sector watching how regulated betting markets balance public revenue against operator profitability, the Philippine case is shaping up as a cautionary tale about what can get lost in the fine print of a privatization deal. It’s a reminder that the terms of a sale, not just its price tag, ultimately determine who benefits when a government cashes out of the gaming business.