The chair of the Philippines Senate’s Committee on Ways and Means, Senator Sherwin Gatchalian, has submitted a report urging the President to shut down the Philippines Offshore Gaming Operators (POGO) industry immediately.

Senator seeks regulatory reform towards POGOs

Senator Gatchalian is an age-old critic of POGOs and has stated that the experiment has failed to deliver on the promised economic benefits. Instead they have “created new avenues for crime and corruption, damaging our country’s reputation among diplomatic allies, foreign investors, potential tourists, and even our own countrymen,” as reported by the GMA Network.

“The data and evidence on hand all point to the same conclusion: Enough is enough. It is time to ban offshore gaming operations in the Philippines, once and for all.”

Gatchalian intends to propose a Senate resolution recommending that measures be taken to support Filipino POGO employees affected by the ban, collect all outstanding taxes and license fees owed by POGOs, and revoke all work visas and employment permits issued to foreign POGO workers.

The report highlights tax evasion as a major issue, with POGOs failing to report gaming revenues worth Php34.2 billion ($630 million), leading to unpaid taxes of Php1.7 billion ($31.3 million). Moreover, the report raises concerns about the Philippines’ relationship with China, as Chinese nationals constitute the largest customer base for POGOs.

It can be inferred from the currency and employment data that Chinese nationals are the most active consumers of POGOs. He also noted that this presents a problem, as gambling is prohibited in China, which means that Chinese nationals are exploiting offshore gaming operations in the Philippines as a means of evading Chinese criminal law.

Reaching out for a comment from Joe Pisano, CEO at the Philippine-based JADE Entertainment and Gaming, the gaming veteran told SiGMA News “The general public perception is that POGO’s operate in Grey or Black markets and criminal and corrupt activities are isolated to the POGO community and not part of the regulated domestic market.”

Pisano conveyed his scepticism regarding the ban’s effectiveness, “We may see an improvement in the country’s AMLC standing, but the Philippines has a very strong domestic gaming market and I doubt that it will make any difference to them if POGOs are banned.” Such a ban may actually motivate a move to black market operations, leading “to an increase in illegal gaming.”

“Philippines has a highly regulated PIGO licensing environment with strong KYC, AMLC and Responsible Gaming and it may be an option to allow those PIGO licenses to expand to off shore jurisdictions where Gaming is permitted.”

Last Friday, Senator Sonny Angara expressed his agreement with Senator Gatchalian’s proposition that POGOs must be closed down. However, he proposed that legal POGOs should be given ample time to cease their operations should such a drastic measure be implemented.

“We respect the work and findings of the committees who have diligently done their work investigating this matter and there is evidence that their presence has had some negative effects, especially in the peace and order domain,” Angara was reported to have said by Philippine News Agency.

“However, I don’t believe three months is adequate time and notice to wrap up operations, especially for those who have made substantial investments,” Angara continued in another statement.

“A longer period would be more reasonable/justified given it was also the government which invited them to invest in the first place.”

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