Philippines Gambling Industry Sees Growth and Changes
China’s new travel restrictions have raised concern within the Philippines gambling industry. Yet the new retail and online casino gaming venues are moving forward. The country has introduced a number of new changes which, the government hopes, will push continued sector growth while clarifying regulations.
As the number of COVID-19 cases in the Philippines lessens, the Philippine Amusement and Gaming Corp (PAGCOR), the Philippines’ gaming regulator, has announced that it will allow licensed gambling venues to increase seating capacity at poker tables. Poker is one of the most popular games in the Philippines and, in addition to the casinos, a number of poker rooms operate throughout the country.
The casinos and poker rooms closed last spring and reopened slowly under strict seating limitations. Now, PAGCOR said that, as long as the operators continue to ensure 1-meter distances between seats, face masks or face shields on all players and staff members and barriers between the seats, the poker rooms and casinos can accommodate additional players.
Some poker rooms have connected two tables to create one larger table in order to comply with the guidelines. PAGCOR will pay frequent visits to the casinos to monitor compliance.
Philippines’ regulatory services are working to stabilize the gaming industry and regulate the offshore gaming operators (POGO) with a new bill that, if it passes, would place a 5% tax on gross revenue from operations. Foreign employees who work for POGOs will be taxed an additional 25% on their wages. If the bill passes the Senate it would then be sent to President Rodrigo Duterte for approval.
POGOs employ thousands of mainland Chinese citizens who come to the Philippines to work. The lower chamber of Philippines’ Congress passed the measure as a way of rebuilding the country’s economy which has been devastated by the coronavirus pandemic. Service providers would be subject to applicable local taxes as well.
From 2016 to 2019 PAGCOR collected $19 billion in fees from online gambling firms. Lawmakers said that the service providers and offshore casino operators failed to pay almost $2 billion in taxes from 2018 and 2019.
A number of POGOs closed down last year after crackdowns, a travel ban on Chinese workers and tighter implementation of tax rules. The new law is not expected to lead to further exodus of online gambling operators, according to PAGCOR but representatives of the offshore operators disagree.
Jose Tria, the regulator’s offshore gaming licensing chief, told Reuters, “Our operators are cognizant of their obligations to our government. All they want is a clear and fixed policy on taxation.”
The Bangko Sentral ng Pilipinas (BSP), the Philippines Central Bank, has warned local banks, remittance transfer companies, electronic money issuers, virtual currency exchanges, operators of payment systems and other financial institutions to avoid being used to transfer funds by unlicensed online betting operators for illegal activities.
Chuchi Fonacier, BSP Deputy Governor, warned BSP-supervised financial institutions (BSFIs) to observe requirements on ongoing monitoring, reporting of suspicious transactions and customer due diligence as stated by regulations for banks and other financial institutions.
According to Fonacier, “BSFIs are also reminded to, among others, deal only with gambling and/or online gaming businesses that are authorized/licensed by or registered with the appropriate government agency duly empowered by law or its charter to license or authorize entities or businesses to engage in such activities, and file suspicious transaction reports as warranted.”
PAGCOR wants the assistance of the Anti-Money Laundering Council (AMLC) and the BSP in its investigation of banks, payment solutions and remittance services which are used to transfer funds for illegal operations in its effort to battle unauthorized gambling activities. The agency has been monitoring online gambling platforms, specifically those promoted through social media platforms. PAGCOR warns the public that patronizing such platforms increases risks of identity theft, credit card fraud and being scammed. The agency reminds the public that only those platforms licensed by PAGCOR may operate gambling in the Philippines.
In the Philippines, it is illegal for any person or organization to take part in any unauthorized gambling activities, either directly or indirectly, including online gambling, if the person or organization offering the service is not licensed by PAGCOR.
The Philippines is expanding its online gambling industry through opening betting to domestic operators and local residents. The country will also offer new services such as horse racing and online cockfighting and target more overseas markets.
As the country’s economy starts to recover from the pandemic, the Duterte administration is looking at avenues such as domestic gambling and outreaches to the international gambling market through remote gaming activities.
In recent years the Philippines has seen an increase in foreigner-only online casinos which, for the most part, target the Chinese market. But China is severely limiting travel to the casinos and is cracking down on online betting venues for its citizens. To give the industry a boost, Manila’s gaming regulators are preparing to open both land-based and online casinos to locals.
Two local casinos have already been given the go-ahead to operate online betting within the Philippines and two additional casinos are seeking approval to do the same. PAGCOR also granted a third betting operator a license to "offer [a] remote gaming platform" that allows "a certain part of gaming [to] take place in the privacy of the client's own home."
Andrea Domingo, chair and CEO of PAGCOR, said, "With the pandemic, older people cannot play [because they] are not allowed to go out of their houses until recently. If they are able to do that, we will be able to get that market back and [it's] safer. Due to the pandemic... people are now going online."
PAGCOR is also looking at ways to reach out to foreign players. One option is to offer an online variation of cockfighting, which is a popular pastime in the Philippines. Online dog racing and horse racing are also being considered."We are focusing on other countries beyond Asia. We might be able to penetrate the cockfighting arena in South America in one to two years from now." Domingo said. The online cock-fighting would be geared towards South and Central America and the horse and dog racing would be marketed in the United States and the UK.