The Philippine Amusement and Gaming Corp. (PAGCOR) has put all existing offshore gaming licensees and service providers on a form of probation that will require them to reapply for licenses under a new regulatory framework. The regulatory body is also moving ahead with plans to sell off its own casino assets, including 41 casinos and 32 satellites.
According to Inside Asian Gaming, the latest crackdown on Philippine Offshore Gaming Operators (POGOs) was announced during G2E Asia by PAGCOR Chairman and CEO Alejandro Tengco.
At the industry showcase in Macau, Tengco pledged to “straighten out” the offshore industry. He didn’t suggest that it be shut down, despite a number of calls from lawmakers to put an end to the operations, which have been repeatedly linked to human trafficking and other crimes.
In the latest incident, PAGCOR canceled the accreditation of a Clark-based POGO hub for alleged criminal activities such as cryptocurrency investment scams and serious illegal detention as well as trafficking.
Following similar allegations, the regulator also issued a cease-and-desist order to a POGO center in Las Piñas City. In that case, during a June 26 raid, authorities rescued more than 2,500 people believed to be victims of trafficking, including 1,500 Filipinos and 1,000 foreign nationals from China, Vietnam, Indonesia, Thailand, Malaysia, Taiwan and Singapore. Police seized computers, SIM cards, cell phones and passports that will be evaluated by forensic experts for potential additional evidence.
At the time, Tengco said, “We condemn all criminal activities that violate Philippine laws and human rights—regardless of nationality.”
At G2E, Tengco said the regulator will no longer “cuddle various illegal activities. We have decided to put all existing licensees and service providers under a probationary stance. They will all have to reapply under a new framework and structure that we will be releasing soon.”
He added, “We shall undertake the painstaking process to weed out any unscrupulous companies and individuals using the PAGCOR license for illegal activities, tainting the name of the whole industry and, more importantly, the Philippines as a whole. With intensified coordination with relevant government agencies, we are confident that we will be able to straighten out and revive the industry once again.”
According to the Philippine Inquirer, under the new regulations, POGOs and service providers will have to demonstrate authorized capital stock of at least PHP100 million (US$1.8 million), an increase of PHP85 million over the previous minimum, plus an equivalent license application fee.
Criminal allegations aside, Tengco said iGaming is growing in the Philippines, with gross gaming revenues peaking at PHP11 billion (US$202 million) in 2022. That figure is expected to more than double this year, to PHP24 billion (US$441 million).
“If we are going to attain all of the projections,” Tengco said, “we will be able to increase by threefold the GGR of the online gaming segment compared to 2020.”
At the same time, plans remain in place to sell PAGCOR’s self-operated gaming halls, some of which operate under the Casino Filipino brand. PAGCOR has faced ongoing criticism for serving as both an operator and a regulator. Reuters has reported that a sale of the PAGCOR casinos, which operate in leased spaces in hotels and other commercial spaces, could bring in about PHP80 billion (US$1.467 billion) for the government.
But before the casinos are privatized, Tengco said, “PAGCOR is undertaking efforts to upgrade its gaming revenues to add value to these properties.”
The plan includes the modernization of PAGCOR’s information and communications technology and cybersecurity infrastructure, installation of a new casino management system, and the introduction of an online arm of Casino Filipino. The agency will also upgrade more than 3,000 electronic gaming machines (EGMs) across its properties, and devise greater technical standards for EGMs to “ensure that these devices deployed in all casino properties within the jurisdiction of PAGCOR are safe, reliable and more importantly, fair to all the players.”
Tengco said the sale has “long been the subject of debate and discussion as the government seeks ways to improve efficiency, profitability and service.” He said divesting the assets will “open doors for an influx of resources contributing to economic development while eliminating a clear conflict of interest in the dual role of PAGCOR as both an operator and regulator.
“Privatization unleashes the potential of a corporation, allowing it to grow and compete in both domestic and international markets through the infusion of new capital and advanced technologies, which can facilitate expansions, upgrades and innovations.
“By focusing on its regulatory functions, PAGCOR will be able to avoid the complexities of running two different shows. It can also streamline its processes and create more revenues that will fund more government projects.”
In May, Tengco told GGRAsia that PAGCOR has received “numerous” inquiries about the casinos, including “foreign and local groups.” He added, “We’re not that ready to entertain [bids] … We are looking at about the middle of 2025” to complete the sale.
Asked whether PAGCOR will sell the Filipino assets individually or as a group, Tengco said, “The idea as of now, is to sell it as a bundled thing. Because we have to be very fair. All the casinos are doing okay, but” not all “are doing as well as the others… So, the idea is to bundle them.”
Earlier this year, Hakan Dagtas, CEO of Philippine casino complex Newport World Resorts in Manila, told GGRAsia its operator would be “interested” in acquiring the casinos if and when they go on the block.
