Philippine President Ferdinand Marcos Jr has ordered the closure of a sprawling network of online casinos linked to a whole host of criminal activities.
Heavily used by non-locals, locally referred to as Pogos, or Philippine Offshore Gaming Operators, online casinos appeal mostly to players based in mainland China where gambling is banned. Nonetheless, that has seen Pogos getting employed increasingly as a cover for illicit activities, including:
- Telephone scams
- Human trafficking
- Money laundering
- Kidnapping
- Torture
- Murder
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They thrived under the predecessor of Mr. Marcos, Rodrigo Duterte, during whose term China is said to have enjoyed an amicable relationship with the Philippines.
Data published by the Philippines Amusement and Gaming Corporation indicates revenue jump to PHP94.61 billion (approximately £1.27 billion/€1.53 billion/$1.61 billion) in Q3. Surpassing the previous year's PHP68.79 billion and up by another 2.7% compared to Q2 for the year.
The PHP35.71 billion generated from electronic gaming, or online gaming, was the star performer in Q3, with an increase of 465.0 percent. The electronic gaming market in the Philippines embraces the operation of online casino, sports betting, bingo, and specialty games.
Alejandro Tengco, chairman and CEO of Pagcor, hailed the "phenomenal" growth. He expects the industry to further expand to reach the PHP100 billion revenue target by the end of the year.
Tengco said that it is an impressive performance, a clear indication that modern technology and mobile gadgets in gaming and amusement will continue to play a major role as the future of gaming unfolds.
By the end of the year, this sector is projected to generate around PHP78 billion in license fees alone. This will contribute significantly to the achievement of our PHP100 billion revenue target.
Not so good news for land-based gambling in Q3
While the growth of online gaming shows no signs of waning, the same cannot be said of land-based gambling. Declines in the land-based gambling sector correspond to similar patterns seen in other regions in the prior few quarters.
Revenues from land-based licensed casinos declined by 2.3% year-on-year, equating to PHP50.72 billion. Casinos remain the main local gambling revenue source in the Philippines, but growth in the online sector is set to potentially undermine their standing.
Meanwhile, it was reported that gaming venues suffered a decline in revenue of 26.3% to PHP3.64 billion, as compared to the record quarterly figures last year of PHP4.64 billion.
In the meantime, income from bingo activities in the country hit a quarter with a decrement of 19.4% to USD 4.52 billion.
POGOs nearing the end in the Philippines
The continuous growth of online over the past few weeks is just before the complete ban of Philippine Offshore Gaming Operators (POGOs).
President Ferdinand Marcos Jr ordered Pagcor to stop all POGO operations by the end of the year, as this was necessary to prevent further “grave abuses and disrespect” of Philippine laws.
Marcos accused the sector of acts such wide-ranging as financial scamming, money laundering, human trafficking, kidnapping, torture, and murder.
The POGOs have been hampered with controversy in the Philippines, with reports claiming their links to serious crimes in the nation. Over 1,000 computers were seized from CGC Technologies after allegations of credit card fraud and human trafficking.
According to Marcos, who announced the ban, "Disguising itself as legitimate entities, their operations have traversed an illicit world far from gaming: financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder."
International reception
Intensely rich illegal gambling operations in the Philippines have created demand for clientele and business partners worldwide. The foreign companies and suppliers in the global gambling industry now aimed to invest in the Filipino labor force and the nation’s digital and physical infrastructure. By doing so, these companies intend to establish online casinos and gambling operations to service foreign patrons from countries like Singapore, China, Hong Kong, and Macau. The most well-known of these operations-Pogo, which mainly Chinese-led-indicates the international workforce composed of almost entirely Vietnamese, Singaporean, and other assorted nationals from Southeast Asia working side-by-side with Filipinos across the urban centers in the nation.
Heavy foreign involvement in the Philippine gambling sectors peaked with at least 300,000 Chinese casino workers employed in the country. However, that number has since decreased due to stricter regulations, COVID restrictions, and governmental crackdowns on illegal operations.
While neighboring countries such as Cambodia, Vietnam, and Malaysia either completely or partly banned gambling owing to pressure from China, the Philippines on its part has endorsed POGO operation due to its economic benefits. Although Xi Jinping of China had personally asked Duterte, the former President of the Philippines, to prohibit online gambling, the latter had the former keep supporting the industry because of the billions of pesos generated in revenue.
Thus, the Chinese government has been openly displeased with online gambling operations in the Philippines. The continuing scandal has revved up a national debate on the fate of Philippine gambling as a legitimized industry.
Rabena observes that President Ferdinand Marcos Jr.has remained neutral on these controversies, even as certain cabinet members, such as Benjamin Diokno, head of the Department of Finance, have expressed frustration at the present gambling ecosystem, especially since it is a precarious dependence on foreign commercial interests. Now, with some government bodies talking about considering a complete ban on some of the main contributors to the industry, the question of the future of the Philippine gaming enterprise comes to the frontline.
With economic losses on one side and intense diplomatic strain on the other, the Philippine government must decide whether or not the gains of gambling outweigh the gambles. With a reliance on the gambling industry possibly backfiring, the future of domestic and international economic cooperation must be gambled on.
