The Philippines Amusement and Gaming Corp. (PAGCOR) has disclosed that it will reduce the amount of tax it levies on domestic online gaming providers, known as PIGOs, from 42.5 percent to 35 percent starting in March.
The tax cut was revealed at ICE VOX in London by PAGCOR Chairman and CEO Alejandro Tengco. He told Inside Asian Gaming the move is designed to curb illicit operations by making the regulated industry more competitive.
Tengco said the PIGO industry grew by 90 percent year-on-year in 2023, but legitimate operators accounted for just 30 percent of that due to the steep tax on revenues. PAGCOR previously lowered the rate from 58 percent.
“One of the things that I had to change upon my ascension to office was that the share we were getting from online licensees was over 50 percent, and that was the main reason why the grey market in the online gaming industry in the Philippines was getting bigger and bigger,” Tengco told IAG.
“So what we have done is brought down the rates to 42.5 percent and as of March we are bringing it down further to 35 percent. The main reason we are doing this is to encourage the ones that are operating illegally to surrender and perhaps apply for a license.”
The previous tax cut “has already turned out to be positive,” he continued, “because not only have we seen the closure of existing licensees decline, we are seeing growth in the number of applications for new licenses. That’s why we are bringing down license fees for legitimate licensees.”
Tengco added that the regulator has “weeded out all the criminal activities” in the Philippine offshore gaming industry, trimming the number of operators from 250 to 75. Those operators, once known as POGOs, are now called Internet Gaming Licensees (IGLs).
“I would like to gladly report that have been able to rid about 70 percent of the old licensees,” Tengco said, “with around 20 more applications pending review. I am of the belief that by doing so, we were able to make everyone aware that PAGCOR means business. And by cleaning up the entire overseas license business, we have shown to the world that we will not tolerate any criminal activities.”
The Philippine government raised approximately PHP 8.8 billion (US$160.78 million) in taxes from POGOs in 2022, according to figures from the Department of Finance.
In a recent interview with Asia Gaming Brief, Wilson Fang, CEO of remote slot solution provider Winn Tech, said the new offshore gaming rules are “show better transparency” and will support the industry’s further growth.
Meanwhile, Tengco also confirmed that PAGCOR is moving ahead with plans to divest of its 41 self-operated casinos, amid criticism of the agency’s dual roles as regulator and operator. “We are in the process of privatizing the 41 facilities that PAGCOR owns and hopefully we will be able to start the privatization process towards the last quarter of 2025,” Tengco said.
“There is much to be done and we have to amend our charter because it doesn’t clearly define what specific role PAGCOR has to have. But I, together with the board, have decided that the only way to go is for PAGCOR to be a pure regulator and get rid of the operations aspect.”
