Nearly two years after a “mass exodus” of Philippine Offshore Gaming Operations (POGOs) from the Philippines, the business may be circling back.
It was 2020 when POGO operators and their employees took flight due to stricter border restrictions, concerns about changing tax and immigration laws, and China’s crackdown on iGaming firms that targeted Chinese citizens. According to Asia Gaming Brief, they relocated to Dubai, the Isle of Man, Thailand, Malaysia, Vietnam and Cambodia. The loss of the POGOs reportedly caused a significant loss in the local real estate business, leaving some 5 million square feet of office space empty.
Now David Leechiu, president of real estate company Leechiu Property Consultants says his group is closing its first POGO office property leasing deal in close to 24 months.
Leechiu called it “a credible, sizable, chunky POGO deal,” and added, “When we sign this contract, we will throw a very big party in the office to celebrate this milestone achievement.”
Colliers Philippines Senior Director Dom Fredrick Andaya last week noted that POGOs currently occupy around 677,000 square meters of office space, taking up 5 percent of Metro Manila’s office stock, compared to 1.3 million square meters and 11 percent of Metro Manila office space in 2019.
Lee said he believes the easing of travel restrictions, along with a ceasefire between the government and the industry on tax issues has driven the comeback.
“It is quite possible that they will make a comeback. They’ve already resolved issues with the Philippine government and certainly, it’s going to be less of an issue,” said Leechiu. “If they can resolve the mobility of the region, then I think a big chunk of the Pogo market could come back,” he added.
Speaking to AGB on condition of anonymity, one online gambling executive said he returned to Manila in January after nearly two years in Dubai. He said other operators are now looking to return to Manila, due to the high cost of doing business in Dubai and increasing scrutiny from law enforcement.
“Dubai has been a temporary solution given the travel restrictions to the Philippines and difficulty in getting work visas there approved. But Dubai is not set up for the long-term stability of online gaming operators. From a cost and stability perspective, we’ve witnessed more crackdowns,” the source said.
Another consultant, also speaking anonymously, said, “There is a huge continent of operators in Dubai right now. But the ones who think that it’s going to be sustainable are daydreaming. The cost of utilities and doing business there are so high, you’ve got crackdowns happening. What’s going to happen when Wynn’s new (UAE) resort comes into play? The government won’t be risking their gaming tax dollars, the online operators will be cracked down on even more.”
All the same, he doesn’t see a flood of POGOs heading back to Manila. “Many will be looking to continue hedging their risk—sending development teams to Malaysia, and basing their servers in Taiwan, for example.”
Andaya believes the most important factor affecting POGO operations in Manila will be “Philippine-China relations with respect to the level of tolerance in allowing this industry to prosper.”
