The Philippines, more specifically Manila, more specifically again the district of Makati has long been an epicentre for Asian market facing live dealer operations.
This is still the case. But the industry has been shaken up quite considerably over the last couple of years. Pretty much all that shaking is at the hands of the shaker of all shakers, President Rodrigo Duterte.
Shortly after winning office, Duterte declared emphatically that online gambling in the Philippines must stop. When Duterte says something must stop, it usually does. So his declaration would have unsettled the already well established net gambling industry (including plenty of Asian market live casinos).
At that point no one really knew who was in his cross hairs: local market facing e-bingo operators and casinos, or operators based in the Philippines but taking online bets from offshore only, or both.
Turns out it was the local market facing operators. They’ve copped a Duterte style hammering.
Operators taking bets from outside the Philippines only (known as POGOs – Philippine Online Gambling Operations) have been allowed to flourish.
New regulator and licensing
It used to be the Government’s master licensor First Cagayan, under authority from CEZA that looked after licensing and regulation of interactive gambling operations. Any time you opened a live dealer table streamed out of the Philippines you would see the First Cagayan logo (highlighted below) somewhere on the table.
You can read more about First Cagayan and CEZA here.
You won’t find this logo anywhere these days.
Following a Duterte executive order back in 2016, CEZA and First Cagayan were stripped of their jurisdiction to regulate and license POGOs. Authority was handed over to another government body, PAGCOR.
If you read the executive order it seems pretty clear that authority for pretty much everything remains with the office of the President. But for the last couple of years at least, that authority has been delegated to PAGCOR.
Execute Order 13 of 2016
The publicly stated aim of EO 13 was to strengthen the fight against illegal online gambling and address corruption and inefficiencies within the existing regime.
In the words of the preamble, its purpose was to address, ‘confusion with regard to the jurisdiction and scope of authority of the different gambling regulators [which] contributes to the proliferation of illegal gambling and gaming’.
The order also points out that clarifying this authority will help to both detect illegal online gambling, and improve revenue collection from legitimate gambling activities.
The order makes it clear that irrespective of the delegation of responsibilities, the President is still running the show:
“The Office of the President shall exercise oversight in the implementation of this order…All government agencies are directed to fully cooperate with the Office of the President in the performance of their duties.”
It’s worth noting that as an executive order, rather than a law passed by the Philippine parliament, EO 13 can be thrown out by a new President as quickly as it was introduced by Dutuerte.
If activity over the last couple of years is anything to go by, PAGCOR has a Presidential mandate to grow the industry fast.
PAGCOR’s website lists the names of 57 POGO license holders. Only company names are published, not all of their associated brands. How many online websites or live dealer studios each license includes is unclear so the list doesn’t really reveal the extent of operations.
The 2% of the gross gaming revenue taxes charged by PAGCOR saw them collect around P1.6 billion ($US 30 million) from POGOs for 2017. This number was over P6 billion ($US 115 million) for 2018.
Not a bad growth trajectory.
Another indicator of the speed at which Philippines POGOs are growing is their impact on the local real estate market.
There has been an influx of overseas workers needed to service the industry (mostly Chinese – tech, support etc to service the Chinese playing market). The numbers have been big enough to drive up real estate prices in certain areas to the extent that many locals feel they are being priced out of the market.
An article in Rappler.com estimates the number of Chinese workers moving in to Manila over the last couple of years could be as high as 250,000. Rental rates in bay area were up 60% in 2018 compared with 2017.