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Freeze on Electronic Gaming Licenses in the Philippines

2019-09-11

Freeze on Electronic Gaming Licenses in the Philippines

The Philippine Amusement and Gaming Corporation (PAGCOR), recently froze the issuing of gambling licenses for both physical and online casinos. This ban was initially expected to be for five years and was mainly focused on preventing the addition of new licenses in the country’s capital, Manila.

Gambling in the Philippines is a significant tourist attraction in the country, with the Manila city centre having twenty casinos, a large amount per capita. Before 1976, gambling in the Philippines was mostly unregulated, and the majority of legal gambling was church bingo events. The creation of PAGCOR in 1976 helped create a regulated industry.

Philippine Offshore Gaming Operators (POGOs)

POGOs are online gaming providers, servicing online customers outside of the Philippines. These entities require individual licenses from PAGCOR, which have been issued since 2016 and are only able to target patrons outside of the country. Such sites are blocked in the Philippines, and online gambling is only allowed at e-Gaming stations.

POGOs were alleged to specifically target patrons in China, where online gambling is illegal. One of the ways in which this was done, was by hiring mostly Chinese staff, numbering almost 100000 employees. There were up to 58 licensed POGOs at the time of the freeze, and no doubt countless unlicensed sites targeting Chinese customers.

Banning of Online Casinos and Licenses

Due to the alleged target of Chinese citizens, the Philippines government faced pressure from China to ban licenses to POGOs. Some government officials in the Philippines say China lacks authority to place such pressure on the government, and the banning of POGOs will have a devasting effect on the economy.

While Chinese authorities hold that POGOs are specifically targeting Chinese citizens, despite online gambling being illegal within its borders, the PAGCOR stated and maintained that it does not issue licenses for companies operating illegally in restricted countries and that Chinese citizens could be playing from anywhere in the world, and not necessarily within China.

58 to 60 Licensees

Recently, the PAGCOR caused confusion when it confirmed that there were 60 POGO licensees, an increase of two licenses from what was previously recorded. This seems to indicate then, that the alleged freeze on the issuing of licenses has in fact not occurred, and has caused increased tension with China.

It is alleged that this increase happened because pending applications were approved and that these applications were pending before the freeze on the issuing of licenses. PAGCOR contends that of the 60 licensees, only 48 are in fact operational, and now continue to face pressure from the Chinese government to investigate and punish those operating illegally.

The Changing Climate of Online Gambling in the Philippines

Due to pressure from neighbouring countries, specifically China, the online gaming industry within the Philippines is under threat of extinction.

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