By Chino S. Leyco
Macau—Online casino operators catering to offshore players are poised to become major catalysts for growth in the country’s gaming industry as the Philippine Amusement and Gaming Corp. (Pagcor) starts putting up stringent regulations for sector.
Jose S. Tria Jr., special assistant to Pagcor’s chairman and chief executive, said late Tuesday that online or electronic casino is a rapidly growing business in the Philippines, generating billions in tax revenues, or about R3 billion for this year alone.
Tria, however, was quick to assure that all Pagcor-licensed e-casinos, or Philippine Offshore Gaming Operators (POGO), do not cater to Filipinos, noting websites of these gambling operators are blocked to Philippine Internet protocol addresses.
“Players must be physically outside the Philippines to access these locally-based online casinos,” the Pagcor official declared.
In an effort to institutionalized all Internet-based casinos operating in the country, the Duterte administration transferred in September last year the regulatory supervision of online gaming companies from the Cagayan Economic Authority Zone (CEZA) to Pagcor.
Tria disclosed Pagcor has already granted a total of 42 POGO licenses since September, while 44 applications are still pending subject to stringent scrutiny by the gaming regulator.
“Pagcor has rejected several POGO applications, particularly those with criminal records,” Tria said. “Not everyone who applied for a license would be granted if he will not qualify based on the new criteria of Pagcor.”
The government, through Pagcor, is collecting at least $150,000 monthly from the gross gaming revenues of each e-casino operator and charges $200,000 annually in license fees.
The Bureau of Internal Revenue (BIR), on the other hand, imposes a five percent levy on Pagcor’s income from online gaming.
“There’s a big difference in terms of regulations between Pagcor and CEZA. Before, online casinos were classified as BPOs [business process outsourcing], which created some confusion. Certainly, many CEZA companies wouldn’t qualify based on our criteria,” Tria said.
To ensure all licensed operators are heeding to Pagcor regulations, Tria said they will create a task force to monitor the gaming activities of the service providers.
Online gambling is a legitimate business with a global market value of $35.97 billion in 2014 and is estimated to grow to $66.59 billion by 2020 amid the rapidly rising popularity of mobile devices.
More than 80 nations, including the Philippines, have legalized online gambling and Europe has the largest market in the world.
While land-based casinos still dwarf the Internet-based operators, Tria said that growth potential for online-gaming is huge, noting many POGOs saw their operations increased more than double in recent years.
“We are estimating that Pagcor’s revenues from online and land based will balance in the future, particularly now that the Philippine government has put in place its regulations on online gambling,” the official said.
“For the BIR alone, we are projecting that taxes from online casinos could double from P3 billion to P6 billion in the near future,” he added.