Philippine Senator Sherwin Gathchalian, an outspoken critic of the country’s iGaming sector, told Asia Gaming Brief that operators are not properly vetted before they set up shop.
He charged the Philippine Amusement and Gaming Corp. (PAGCOR) with looking only at “the minimum requirement” of “capitalization … If you’re incorporated, you fulfill the minimum qualification.”
The industry has been tarnished by reports of human trafficking, abuse, money laundering and other crimes.
Last August, PAGCOR implemented a revised regulatory framework for iGaming and rebranded Philippine Offshore Gaming Operators (POGOs) as Internet Gaming Licensees (IGLs).
At the time, PAGCOR Chairman Alejandro Tengco, said the regulator had “weeded out all the criminal activities” in iGaming, trimming the number of operators from 250 to 75, about 70 percent of former licensees.
“By doing so, we were able to make everyone aware that PAGCOR means business,” he continued. “And by cleaning up the entire overseas license business, we have shown to the world that we will not tolerate any criminal activities.”
Gatchalian is skeptical, and points to a March raid on POGO facilities in Bamban, Tarlac, in which 875 Filipino and foreign workers apparently were freed from forced labor. The raid followed a tip from a Vietnamese national who escaped the facility and a Malaysian national who claimed he had been illegally detained inside the compound.
According to the Philippine News Agency, some workers were coerced into running internet “love scams,” using scripts like those discovered in other POGO raids.
Along with PAGCOR, Gatchalian blamed the Department of Immigration and the Department of Foreign Affairs for issuing visas without thoroughly scrutinizing applicants.
“There should be some form of background check, for example, if they have cases in Interpol or cases in other countries,” he told AGB. “Because of the sheer volume of these individuals—Chinese in particular coming to the Philippines—I don’t think they do any background checks. So they issue visas and these applicants claim that they will be working in IGLs, so they’re issued working permits. But eventually it’s discovered that they have a warrant of arrest.”
He said, “PAGCOR doesn’t do any background check. As long as you have visa and working permits, you’re good to go.”
Senator Rita Hontiveros joined her colleague in calling for tougher oversight of the industry, and says foreigners may be using bogus documents to get Philippine citizenship. Even Alice Guo, mayor of Bamban, is suspected of lying about her background to obtain citizenship. Hontiveros has also alleged that Guo has criminal ties.
Moreover, according to Gatchalian, POGOs are undervaluing their tax payments. “The gross gaming revenue they declare with the Bureau of Internal Revenue, the tax authority, and the amount they declare with PAGCOR are different. So they rely on self-declaration. And we discovered that the two declarations are different, BIR being grossly undervalued.”
Gatchalian said his committee found that “criminal syndicates involved in POGOs have already managed to penetrate the higher echelons of the enforcement agencies” in the Philippines, mostly through bribery and financial payoffs.
“They’re willing to put in the money because they know that they can minimize risk and they have options to protect themselves, whether it’s from the enforcement agencies or from the politicians themselves,” he continued. “They know that they have protection at the upper echelons of government.”
In another high-profile case last fall, a POGO hub in Pasay City was raided. Workers there reported a host of illegal activities, including forced detention, physical abuse and sexual assault. Some claimed they had to work a minimum of 12 hours a day. Investigators also found evidence of torture, and a group of Filipina women were reportedly discovered in an “aquarium-style” enclosure, to be viewed by patrons.
In the aftermath, the Pasay City police chief and 26 officers were relieved of their duties, and others faced investigation. “Pasay police officers were either negligent or complicit in covering up for the POGOs,” said Hontiveros.
Gatchalian told AGB “the majority of senators want to ban POGOs.” He added, “There’s some push in the lower House to ban POGOs, and that bodes well with us.”
