Clark Freeport’s clampdown on online gambling: PAGCOR’s latest measures

The aftermath of the police raid on a Clark Freeport scam syndicate, which resulted in the liberation of over 1,100 enslaved workers, has sparked a series of actions. As a response, new measures from PAGCOR have been implemented, including a freeze on the acceptance of applications from online gambling operators in the zone and the establishment of a security advisory body.

Freeze on online gambling applications and security advisory body

In an announcement made on Friday (June 9), the Philippine Amusement and Gaming Corporation (PAGCOR) revealed its collaboration with the justice department and various enforcement agencies in the formation of the Clark Security Advisory Council. This council aims to provide support and guidance to the Clark Development Corporation (CDC), which oversees the management of the zone.

Following the council’s initial recommendations, the CDC has decided to temporarily suspend the acceptance of licensing applications from both new and existing foreign-facing online gambling operators (POGOs), according to statements made by CDC President and CEO Agnes Devanadera.

Furthermore, the involvement of Clark in expediting visa processing for foreign labour is also under scrutiny and undergoing a review process, as highlighted by Devanadera.

During a press conference, she emphasised the importance of facilitating business operations within the zone, stating, ‘Of course, we’re focused on promoting ease of doing business while in the zone, and that’s why we strive to process all applications as quickly as possible. However, in light of recent abuses, we need to learn from our experiences and tighten the reins.’

Jessa Fernandez, PAGCOR’s Assistant Vice President for Compliance, disclosed that a set of changes to POGO policies was originally slated for completion by mid-June. However, these plans were expedited due to the raid on the Clark Sun Valley Hub precinct on May 4.

Clark scam syndicate bust spurs POGO reforms

Responding to the raid, Fernandez outlined two significant updates that have been incorporated into the POGO licensee operating manual, preceding the broader package of reforms.

Sub-licensing, a common practice in Clark Freeport and among POGOs and support companies, has effectively been discontinued as an officially accepted practice for POGOs following the Clark raid.

Fernandez explained the consequences for licensees or service providers found to be sub-licensing or permitting unauthorised entities to use their licences or accreditations issued by PAGCOR, stating, “Upon discovery, they will be subject to a show-cause order and face a fine of $50,000.”

“If violations are found to be substantiated, their accreditation or licence will be promptly revoked,” she stated firmly.

Fernandez, speaking in Tagalog, acknowledged that PAGCOR had not previously given much attention to these matters. However, she emphasised the organisation’s newfound strictness in monitoring activities to ensure the cessation of operations by companies that are mere licensees of PAGCOR and the CDC, as translated by the Rappler media group.

Following the cancellation of PAGCOR accreditation for Sun Valley Clark Hub Corp and CGC Technologies, which were involved in hosting the Colorful and Leap Group Company scam syndicate, there remains only one authorised POGO licensee in Clark, accompanied by four service providers, as stated in a PAGCOR statement on Monday.

In late May, Oriental Game, a prominent player in the online gambling industry connected to Filipino gambling mogul Kim Wong, was slapped with a $350,000 fine by PAGCOR for their failure to supervise the operations of Sun Valley Clark Hub Corp, an affiliate that essentially turned the compound into a “POGO hub.”

The recent crackdown in Clark adds to a string of setbacks for the foreign-facing online gambling industry, which has suffered greatly due to pandemic restrictions, threats from the Chinese government, regulatory tightening, and ongoing calls from several senators to completely dissolve the industry.

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