Calls to ban online gaming unlikely to hit legal POGOs, industry insiders say?

A Philippine senator’s recent attempts to put a stop to the online gambling industry are unlikely to mean the end of POGOs, but could serve as a wake-up call for non-compliant players in the space.?

Speaking with SiGMA News, two industry insiders in Manila shared insights into the likely impact of recent calls to ban online wagering on the local industry.?

Joe Pisano, CEO of Jade Entertainment, believes regulatory scrutiny will ultimately be directed towards illegal operators that “contribute nothing to the community,” while a Manila-based POGO service provider said that the current state of affairs will lead to an “overdue reorganisation” of the sector.

In September, Philippines Senate Majority Leader Joel Villanueva filed Senate Bill 1281, seeking to prohibit online gambling and ‘’the placing of wagers, or bets, through the internet or any form of online gambling activities,” arguing that the “social cost of gambling is too high.”

In his explanatory note, he highlighted that the growth of? POGOs, or Philippines Offshore Gambling Operators, in the country “has resulted in rising criminality, including prostitution, and increased threat of money laundering, among others.”

POGOs unfairly linked to illegal online gambling

Pisano however believes that outside observers may have unfairly lumped both legal and illegal gaming operators into the same boat.?

“I think that there is confusion between POGOs and illegal operators,” said Pisano.?

“What needs to be addressed is illegal online operators that contribute nothing to the community. POGOs are legal, they pay their taxes and contribute to the community.”

Under the proposed “Anti-Online Gambling Act,” almost all online gambling in the country would be banned and any person who places, receives, or otherwise knowingly transmits a bet or wager by any means which involves the use, in whole or in part, of the internet, would be punished by imprisonment ranging from one to six months or a fine ranging from P100,000 to P500,000 ($1,694 to $8,473).

However, the Manila POGO service provider, who asked to remain anonymous due to sensitivities, noted that while some Philippine lawmakers are seemingly in favour of the outright ban, others have been more cautious and want to preserve the economic benefit the industry brings to the country.?

Smaller players may exit

They believe that any reports about the incoming death of the POGO industry are greatly exaggerated, adding that: “Overall, the legal POGOs should be here to stay.”

Meanwhile, Pisano says that even if calls to end POGOs become real, it would only be for “the short term until they realise that it only creates a larger illegal business.”

Instead, what we will likely see in the coming months and years is a careful resurgence of POGOs in the Philippines, with large operators re-establishing their positions and continuing to grow.?

Many smaller ones will fall by the wayside as the cost and effort required to operate legally will prove too much for them, said the POGO service provider.?

Any talk about the cancellation of the visas of thousands of Chinese workers and their deportation is likely meant to achieve two things: act as a wakeup call for legitimate operators to get their ducks back in a row and be a sign for those operating outside of the law to leave the country, they added.

Filling government coffers

At the moment, the industry is contributing around P128.5 billion per year to the economy, which is a far cry from the P600 billion it sent to the government in its heyday.?

Before Covid-19, the sector was filling countless offices in the Philippines, with a peak of over 50 master licenses and around 500 support licenses being put to use in the country’s capital alone.?

Today, fewer than 30 master licenses and around 250 support licences are in use.

However, the source said that the government under recently-elected president Bongbong “BBM” Marcos will be looking for more ways to raise revenue in their quest to refill empty state coffers and PAGCOR has a good track record of helping with this.?

He added that Manila will play a big role as a conveniently located hub for gambling operators in the future, just as it has done for the last 10 years.?

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