One of the rare changes in the country’s constitutional restrictions on foreign ownership was made in 2010 when gambling casinos were opened to majority foreign equity in the Foreign Investment Negative List (FINL).
Since then the Philippine gaming market has become one of the biggest in the region, expanding at such a robust pace before the pandemic wreaked havoc on the world.
Figures released in February show gaming revenues either generated or overseen by the Philippine Amusement and Gaming Corp. (Pagcor) hit P248.5 billion in 2019, a 15.1 percent improvement over 2018’s revenues and nearly 41 percent higher than 2017’s.
The bulk of the Philippines’s casino revenues, around P216 billion, came from Solaire, Okada Manila, City of Dreams Manila, Resorts World Manila, and the growing casino industry in Clark, which all enjoyed a major surge in VIP revenue before the pandemic.
In contrast, Philippine Offshore Gaming Operators (POGOs) contributed only P5.7 billion to Pagcor in 2019, which was even lower than the P6.11 billion these POGOs paid in 2018.
The Pagcor-run Casino Filipino earned more than all the POGOs put together. In 2019, Casino Filipino earned P12.6 billion from mass-market tables, P16.5 billion from slot machines and P7.8 billion from junket-derived revenue.
Even the small electronic gaming sites that offer slots, bingo and sports betting to Filipinos earned more than the POGOs. They reported a revenue of P32.1 billion in 2019, most of which was derived from eBingo operations.
Once this pandemic is over, the Philippine gaming industry can go back to making huge contributions to the economy by boosting tourism and tax revenues and job creation (casinos provide jobs to thousands of tourism and hotel and restaurant management graduates, in particular).
Actual gaming revenues don’t just come from the gaming tables, but also from food and beverage, hotels, retail, entertainment, meetings and conventions. Tourists who come here to gamble usually also wish to see the beaches and the country’s other attractions.
All these are contributed by the brick-and-mortar casinos, not by POGOs whose operations cater to Chinese mainlanders sitting in front of their computers.
As for POGOs, we said in a previous editorial, we have no problem with Chinese workers—what with the Philippines being a labor exporter itself for decades. And we have no problem with foreign companies operating here, since our entire outsourcing industry goes way beyond call centers to include almost any kind of service or operation that could be contracted out to our country.
But please follow our laws. Pay the correct taxes. Make sure your employees are legit.
Internal Revenue Commissioner Caesar R. Dulay said almost all POGOs have unpaid taxes. Aside from the P50 billion POGO firms owe the government in 2019, Pagcor said there were about 100 to 120 illegal POGO firms operating in the country. From April to early June, when Metro Manila was under enhanced community quarantine, authorities raided at least six underground POGO operations.
The Department of Labor and Employment also discovered some 6,678 illegal foreign workers in Pagcor-licensed POGO firms and service providers during its labor inspections in 2019.
Obviously, many POGOs have been flouting our laws, not paying the correct taxes, skirting immigration authorities and local governments, even violating the rules and regulations and health guidelines set by the Inter-Agency Task Force on Emerging Infectious Diseases.
It’s up to our government to enforce our laws, rules and regulations, and make everyone—foreigners and locals—follow them. POGOs are not exempted and the government should not bend over backwards for law-breaking POGOs.
Whatever legislative and administrative reforms are necessary to root these lawbreakers out from the local gaming industry must be done to make sure the proceeds of POGO operations benefit the government and our people. We cannot just sniff out scandals in pursuit of a headline. We must also help find solutions to these POGO problems.