Alfredo Lim, president and chief executive of the Philippine Amusement and Gaming Corp. says that selling off PAGCOR’s nine casinos is “out of the question,” because the money they make is essential to fund government programs.
PAGCOR is not simply a casino operator but the regulator of all gaming in the country; the potential for conflicts of interest has prompted critics to call for privatization, and last April the Governance Commission for Government-Owned and Controlled Corporations formally asked President Rodrigo Duterte to approve the privatization. In its recommendation, GOCC stated its “firm belief” that there should be “a level playing field between GOCCs and corporations in the private sector performing similar commercial activities.”
In a 2018 story on the PAGCOR debate, the Economist called the body “controversial, but also an important taxpayer as well as an employer of more than 11,000.”
In part because of those reasons, Lim says it would be “disadvantageous” for the government to privatize PAGCOR. For one thing, the February enactment of a universal health bill relies on PAGCOR for funding.
“In fact,” Lim said, on the sidelines of the ASEAN Gaming Summit, “50 percent of our contribution to nation building will be appropriated to finance the implementation of this program.”
The Philippine gaming industry generated PHP215.8 billion (US$4 billion) in total revenue in 2018, up from PHP176.5 billion the year earlier, reported Asia Gaming Brief. PAGCOR’s own casinos under the Casino Filipino brand generated PHP35.8 billion.
The government has also enjoyed growing revenues from its Philippine Offshore Gaming operator licenses, with “Chinese firms flooding into the country,” according to AGB. The regulator has issued a total of 57 POGO licenses. With no limit to the number that can be issued, Lim expects that figure to rise.
However, POGO has received unwelcome scrutiny lately with allegations that 100,000 foreign workers are working illegally and not paying taxes.
Finance Secretary Carlos Dominguez claims the government is being shortchanged by about PHP3 billion (US$58 million) in taxes each month. The Department of Finance estimates that taxing these workers will add at least PHP22 billion (US$1.49 billion) to the nation’s coffers each year.
Senator Leila M. de Lima has filed a resolution seeking an inquiry into illegal workers at all foreign gaming firms, particularly POGOs.
“Given the huge discrepancy between the number of foreign POGO workers in the Philippines and tax revenue from them, there is a need to document all foreign workers to ensure the legality of their presence and identify their taxpayer classification to accurately determine their corresponding tax liability,” she said in the resolution.
Senator Lima has called for the inquiry in the hopes of creating legislation “that would increase our capability to meet the increasing challenges in implementing our laws on resident foreign nationals.”
According to CDC Gaming Reports, the estimates of lost taxes was based on figures attributed to Chinese media that said the workers, reportedly mostly of Chinese origin, are earning an average of US$1,500 per month.
Meanwhile, PAGCOR says it will be working with government agencies to fight online gambling. A new inter-agency council includes the Philippine National Police, the National Bureau of Investigation, the Bureau of Immigration and the Office of Cybercrime, all working under the Department of Justice to gather intelligence, conduct investigations and prosecute those who participate in illegal gambling. At a press conference, PAGCOR Chairwoman and CEO Andrea Domingo the regulator has been working “with the investigative and enforcement arms of the government like the NBI and the PNP. We provide them with the information as well as certification.
She added that increased oversight of POGOs has helped fill government coffers. “In 2016, POGO operations generated PHP657 million (US$12.5 million) followed by PHP3.924 billion in 2017 and PHP7.365 billion (US$140 million) in 2018,” Domingo said.
“When the current management strengthened PAGCOR’s regulatory authority over Philippine offshore gaming operators, we immediately saw its significant contributions to PAGCOR’s overall revenues,” Domingo said.
