Philippines enacts decree by President Marcos Jr., prohibiting foreign-based online gambling and sealing offshore market operations.
Marcos Jr., Philippine President at 66, Plans to Shutdown Foreign Online Gambling by Year's End
Marcos Jr., the Philippines' President, declared on a recent Tuesday that the nation's foreign online gambling sector will be shut down by the year's end [EN link]. The Philippines' gambling regulator will revoke licenses from foreign gambling operators involved.
These operators, mainly from China, where gambling is prohibited, cater to Chinese players primarily. They are known as Pogos (Philippine Offshore Gaming Operators).
Marcos Jr. also revealed plans for the Philippines' gambling regulator and law enforcement agencies to collaborate to enforce the ban. No fresh Pogos licenses will be issued moving forward.
Similar events occurred in 2019, when issuance of gambling licenses was temporarily halted. The government cited concerns related to illegal operators and security lapses as reasons for this decree.
Foreign Gambling Operators and National Security Threats
Marcos Jr. explained the ban by stating it was needed to safeguard the Philippines' national security. These foreign gambling operators allegedly utilize their online casinos as a front for illegal activities.
In a speech to the nation, he pinpointed specific illicit activities:
Under the guise of legitimate businesses, they have infiltrated illegitimate areas, such as financial fraud, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder.– Ferdinand Marcos Jr., President of the Philippines, BBC
Recent discussions about foreign gambling companies and their unlawful activities have gained momentum due to several high-profile raids and arrests. There have been instances of "casino kidnappings", where debtors are seized to collect money.
In a small Philippine town, one prominent Pogo was found to be the mastermind behind a fraud ring. The town's mayor is accused of spying for the Chinese government.
Suspicions also abound concerning secret clinics run by foreign gambling operators, which cater to their employees and fraud machinery assistants, mainly offering plastic surgeries for law enforcement evasion.
23 Billion Filipino Pesos (362 Million Euros) in Revenue to be Lost
The Philippines' complete ban on foreign online gambling will have repercussions, causing a loss of 23 billion Philippine pesos (approximately 362 million euros) in license fees and tax revenues. Presently, there are more than 400 licensed and numerous unlicensed foreign online operators in the Philippines.
Workers in this sector will also lose their jobs. Currently, approximately 40,000 locals and 23,000 foreigners are employed in the industry. The government plans to aid these employees through special training programs.
At the moment, international employees working for unlicensed foreign online gambling companies are expected to be deported.
Online Gambling's Boom in the Philippines since 2016
The Philippines' online gambling market has existed since 2016 and has since flourished. This growth was partly driven by the Philippine gambling industry attracting visitors from China, where gambling is legal only in the Special Administrative Region of Macau.
This high demand not only contributed to substantial tax revenues and license fees but also spurred demand for office space, housing, and transportation services. The recently imposed ban by President Marcos Jr. could bring significant changes to the country.
The Ban's Impact on Philippines-China Relations
Since taking office in 2022, Marcos Jr. has made efforts to strengthen the Philippines' ties with its longtime ally, the US. However, relationships with China have cooled down significantly over recent months mainly due to ongoing territorial disputes between China and the Philippines over the South China Sea.
It remains to be seen how the new ban on POGOS will affect the relationship with China in the coming weeks and months.
In response to concerns about national security threats, President Marcos Jr. announced that foreign gambling operators, such as Pogos, will be banned due to their alleged involvement in illegal activities like financial fraud, money laundering, and human trafficking. This decision is expected to result in a significant loss of revenue, with 23 billion Philippine pesos (around 362 million euros) in license fees and taxes no longer being collected.
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