Although it’s clear that the ban announced by President Ferdinand Marcos Jr. will end the operations of POGOs and internet gaming licensees, it’s not yet certain whether that ban extends to other related sectors in the gaming industry that employ around 10,000 Filipinos
MANILA, Philippines – With the executive order banning Philippine offshore gaming operators (POGO) set to come out soon, it’s not yet clear which parts of the country’s multibillion gaming industry will be affected, though regulators are hopeful that e-gaming and support sectors will continue operating.
Gilbert Cruz, chief of the Presidential Anti-Organized Crime Commission (PAOCC), said that the Executive Order (EO) banning POGOs will be announced in the next two weeks. Cruz said that the definitions and broad concepts of what will be banned are already in the draft, but details on the implementation are still being finalized.
“After the drafting of the executive order, we’ll be calling for a technical working group, and that’s to include Pagcor [Philippine Amusement and Gaming Corporation] and other agencies, just to make sure na everything na kailangan sa (everything needed in the) executive order will be touched,” Cruz said in a Senate committee hearing chaired by Senator Sherwin Gatchalian.
Although it’s clear that the ban announced by President Ferdinand Marcos Jr. will end the operations of POGOs and internet gaming licensees (IGL), it’s not yet certain whether that ban extends to other related sectors in the gaming industry that employ around 10,000 Filipinos.
Currently, the gaming industry includes:
- POGOs or IGLs
- Special Class of BPO (SCBPO)
- Support service providers
- Electronic gaming licensees
- Casinos
All POGOs and IGLs will be ordered to wind down operations by the end of 2024, following Marcos’ directive. These are the offshore gaming operators which have acquired a negative reputation for engaging in scamming, human trafficking, and other illegal activities. (READ: Making sense of the Alice Guo enterprise)
SCBPOs, like the name suggests, are companies that act as BPOs for gaming companies abroad. Pagcor chairman Alejandro Tengco said in the Senate hearing that SCBPOs must submit their contracts with the offshore gaming companies they service before obtaining a license.
“They do not accept any form of bets. The main thing that they do is serve as backroom operations of big, legitimate gaming companies based all over the world,” Tengco said.
Tengco said that under his administration, 14 to 16 licenses have been given to these SCBPOs, which all serve overseas gaming companies. As of August 31, these companies employed a total of 5,038 workers, with 4,901 being Filipinos and 137 being foreign nationals.
Asked whether the executive order will include a ban on the special class of BPOs, Tengco declined to comment, stating that he did not want to preempt the executive order.
Aside from the SCBPOs, some companies which support gaming operators have also set up shop in areas managed by investment promotion agencies. For example, the Cagayan Economic Zone Authority (CEZA) plays host to what it calls “interactive gaming support service providers.” According to CEZA, these companies do not run any gaming operations, although they work with overseas gaming operators.
“We just give content, technical support, and IT support. No bets at all because we don’t have inbound [internet traffic]. Our [internet service provider] is only outbound. We block any inbound traffic. That is the difference between Pagcor and us,” CEZA administrator Katrina Ponce Enrile said.
Enrile said that CEZA has around 2,800 employees working in these companies. Meanwhile, the Authority of the Freeport Area of Bataan also has 3 service providers employing at least 1,700 Filipinos.
But if these SCBPOs and service providers continue to exist after the POGO ban, could POGOs simply just switch to this sector? PAOCC thinks it’s unlikely.
“It would be more comfortable to POGO workers and POGO operators na mag smaller version nila ng POGO hiding inside maybe a condominium or apartment, but not going doon sa mga special class BPOs na ‘yun kasi it’s already recorded e (to make smaller versions of POGOs hiding inside maybe a condominium or apartment, but not to go into those special class BPOs, because those are already being recorded),” PAOCC chief Cruz said.
What about electronic gaming?
Even as POGOs close down, the gaming industry continues to thrive through its fast-growing and lucrative electronic gaming operations. Glitzy land-based casinos are also getting involved, with Tengco noting that all but one of the casinos in the Entertainment City area now have e-gaming operations.
Until the executive order regarding POGOs comes out, there is still a possibility that the ban could extend to electronic gaming operations too, although Tengco built a strong case against it during the Senate hearing. In 2023, Pagcor earned a record P22.5 billion from online gaming fees alone. This year, Tengco estimates that online gaming fees could account for as much as 35% of Pagcor’s revenue.
“This is the trend, and I think this will be the future of gaming,” Tengco said, adding that the revenues of integrated resorts and casinos are beginning to plateau. “Most jurisdictions around the world are legalizing online gaming, even the first world countries.”
Tengco said that the rise of online gaming in other parts of the world could also further boost demand for SCBPOs in the Philippines, which he calls a “sunrise industry.”
The Pagcor chief also argued that if the government decided not to regulate electronic gaming, it might only expand the already-existing gray market of illegal online gaming operators in the country.
PAOCC Undersecretary Cruz said that a technical working group, which includes Pagcor, is still set to deliberate on whether e-gaming and SCBPOs will be included in the POGO ban. – Rappler.com
