POGO ban will have minimal impact on gaming industry: Pagcor
The Philippines’ gambling regulator, the Philippine Amusement and Gaming Corporation (PAGCO), told GGRAsia that the announcement of the ban on foreign online gambling operators “will have minimal impact” on the country’s overall gambling industry, as the sector still accounts for a small percentage of total gaming revenue (GGR).
Philippine President Ferdinand Marcos Jr. announced the ban on formerly known as Philippine Offshore Gaming Operators (POGOs) during his State of the Union address on Monday.
The head of state directed PAGCO to “scale down and cease operations” of POGOs, now known as “Internet Gaming Licensees” (IGLs), “by the end of the year.”
As of July 16, there were 38 IGL permit holders and seven provisional license holders authorized to offer games to overseas customers, according to Pagcor data.
Pagcor Chairman and CEO Alejandro Tenco said Tuesday that 43 license holders are currently operating.
Tenco told the Senate hearing that the ban on offshore gambling operators also applies to offshore gambling providers with valid operating licenses.
“We have no problem shutting down POGOs because we can invoke national security and presidential orders,” the top regulator said, adding that PAGCO’s role is not to wind down the operations of “illegal” offshore gambling operators.
Tengo said the Philippine government stands to lose about 23 billion pesos ($393.3 million) a year in license fees and taxes on offshore operators.
In a written response to GGRAsia on Tuesday, Pagcor vice president of external communications Catalino Alano said: “Financially, the decision to ban POGOs will have a minimal impact on the Philippine gaming industry as this segment accounts for less than 5% of the Philippine gaming market. [aggregate] “GGR”.
The official said Pagcor “still believes” it can reach its total revenue target of P100 billion in 2024 “with the continued strong performance of its e-gaming division.”
Pagcor’s total revenue for the first half of the year was P51.76 billion, up 42.92 percent from the same period last year, official data showed.
Gaming operations contributed the bulk of the authority’s revenues, at P45.39 billion. Of that, 45.53 percent, or P20.66 billion, was generated by the electronically distributed gaming segment, which includes “e-bingo, e-games and bingo subsidies,” according to the regulator.
The e-gaming segment recorded GGR of 63.01 billion pesos in the six months ended June 30, up 208.4% from the same period last year, the agency said.
Alano said the ban on overseas gambling operators “can be seen as a positive development as it demonstrates the government’s political will to address fraudulent and criminal activities associated with POGOs.”
“We believe this ban will not have a serious impact on the image of the Philippine gaming industry,” he told GGRAsia.
Widespread support
Tengco of the Philippine PAGCO said last week that the agency was opposed to a specific bill that proposed to ban all forms of online gambling in the country, whether the services are overseas or domestic. The online sector in the Philippines also includes other forms of remote gambling such as bingo and Philippine Inland Gaming Operator (PIGO) licenses.
Key figures in the administration and the Senate have supported the president’s decision to ban POGOs.
Justice Minister Jesus Crispin Remulla said on Monday that the head of state’s decision demonstrated the government’s “strong determination to administer justice effectively and fairly.”
Treasury Secretary Ralph Recto said in a statement on Tuesday carried by local media that the Treasury Department will help Filipinos affected by the ban on foreign gambling operators find new jobs.
“We need to make sure that all displaced Filipino workers have new jobs by the end of the year, and I think we have more than enough time,” Recto said.
“The Ministry of Finance will work closely with the Ministry of Labour and Employment to ensure that workers’ incomes are not significantly impaired and that they are provided with appropriate retraining and upskilling training for new employment,” he added.
According to a Finance Department study, offshore gambling operators bring in about 166 billion pesos in economic benefits annually, but the economic losses, including damage to the country’s reputation, amount to more than 265 billion pesos.
Senator Risa Hontiveros, who is leading a Senate investigation into alleged ties between POGOs and criminal gangs, said the decision to ban foreign gambling operators was a “victory for the entire country.”
“POGOs have brought countless unspeakable social ills to this country,” she said in a statement. “I commend the president for speaking out.”
She added: “We will continue to demand accountability at Senate hearings and strengthen policies to ensure an industry like POGOs never emerges again.”
(Updated July 24, 7:45 AM)
