Philippine offshore gaming industry’s future uncertain amid govt crackdown on illegal POGOs

Camille Elemia
Philippine offshore gaming industry’s future uncertain amid govt crackdown on illegal POGOs Gambling dice, cards and chips are seen on the keyboard in this illustration picture, June 5, 2020.
[Dado Ruvic/Illustration/Reuters]

The future of offshore gambling operations in the Philippines – targeted mainly at customers in China – is in question after the new government here announced a major crackdown this week on illegal online casinos and Chinese overstayers.

The focus on these Philippine offshore gaming operations, or POGOs, intensified after a spate in crimes linked to them such as killings, kidnappings, and prostitution. Lawmakers meanwhile are divided over whether the online gaming should be done away with completely because it generates millions of dollars in revenue.

“Do you want the country to suffer reputational damage – That the Philippines is a nest of foreign syndicates and gamblers? Do you want a breakdown in law and order?” said Senate Minority Leader Aquilino Pimentel III, who pushed for an outright ban on POGOs.

“We should not wait for them to even get stronger and fight the government. Let’s not be too greedy,” he told BenarNews on Wednesday.

The justice department under the new administration of President Ferdinand Marcos Jr. announced on Monday that it would close 175 illegal offshore gambling firms and deport some 40,000 Chinese workers who overstayed their visas.

The regulator, the Philippine Amusement and Gaming Corporation (Pagcor), revoked the operators’ licenses on Sept. 14 because their permits had expired or they had not paid their dues.

POGOs entered the country in 2016 at the start of the term of then-President Rodrigo Duterte and flourished due to loose gaming laws here. Such operations cater largely to customers in mainland China, where gambling for money is banned. At their peak, POGOs hired more than 300,000 Chinese workers.

On Tuesday, the Chinese Embassy in Manila said it would cooperate with Philippine authorities in the deportation of illegal workers and reiterated its stance against gambling.

“According to the Chinese laws and regulations, gambling in whatever form by Chinese citizens, be it online gambling or gambling overseas is illegal,” the embassy said in a statement Tuesday.

“[We will] continue to strengthen communication and cooperation with the Philippine government and law enforcement agencies in particular in this regard, and handle deportation among other issues in a constructive manner,” it added.

During his six years in office, Duterte sought closer ties with Beijing that led to an influx of Chinese investments, businesses and tourists here.

He had resisted calls to issue an outright ban on Chinese workers, despite increased criminality that police blamed on Chinese syndicates preying on their own countrymen. He left office in late June.

Economic and social costs

Meanwhile a section of lawmakers and some businesses are against an outright ban on POGOs, citing the potential economic impact.

The government generated 7.2 billion pesos ($122.2 million) in 2020 and 3.9 billion pesos last year in licensing fees alone from POGOs, according to the finance department.

Gambling operations have displaced call center companies as the single biggest driver of property demand, according to Leechiu Property Consultants Chief Executive David Leechiu. These operations are also the key drivers for the housing and rentals market.

According to him, the exit of the remaining POGOs, which occupy more than 1 million square meters of office space nationwide, will lead to bigger losses.

“The problem is not the POGO industry. The problem is all the illegal operators that are skirting the law. The solution to that is enforcement,” Leechiu said in an interview televised on the One News channel last week.

“A total ban in the POGO sector will be [bad]. There’s got to be a better way around it,” he said.

Joey Salceda, chairman of the House Ways and Means Committee, said regulation, not an outright ban, is the solution. A complete prohibition of these firms would only lead to underground operations.

“You cannot stop gambling unless you stop digitalization,” Salceda said in a statement on Tuesday. “The solution is to just regularize and regulate.”

Sen. Sherwin Gatchalian, who chairs the Senate Ways and Means Committee, has called for another probe into the issue.

“Clearly, any economic benefit that we derive from POGO operations should substantially outweigh any social cost that we must bear in exchange for their presence in the country,” Gatchalian said in a statement.


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