The invisible hands in Pogos

By: Antonio T. Carpio, Philippine Daily Inquirer, 7 May 2020

There are invisible hands in the Philippines and China orchestrating the activities of Philippine offshore gaming operators (Pogos). Pogos run transnational gambling operations through online video. Smartly dressed young Chinese female dealers preside over casino tables located in condominium offices in the Philippines while their player-clienteles are ensconced in their residences in China. Declared taxable revenues of Pogos in 2019 are estimated at $7.9 billion. The operations of Pogos are illegal in both the Philippines and China. Apparently, invisible hands have allowed Pogos to thrive in both countries despite clear violations of their respective laws.

First, under its Charter, Pagcor is authorized “to xxx license gambling casinos xxx within the territorial jurisdiction of the Republic of the Philippines.” Pagcor cannot authorize its Pogo licensees to extend their gambling operations in the territory of China. Such an act is ultra vires—outside Pagcor’s legal authority and a violation of its own Charter.

Second, in an attempt to legitimize the Pogos’ online operations in China, Pagcor in its 2018 Manual requires Pogo license applicants to submit a “license from foreign jurisdiction where the feed will be streamed to, or license of the recipient operator abroad.” Pagcor’s 2016 Rules also provide that “licensed offshore gaming operators shall be solely responsible for ensuring that no wagers would be accepted xxx from jurisdictions where such forms of gambling are prohibited.”

These conditions for the operation of Pogos can never be complied with by Pogos, which all cater to the Chinese mainland market. There is no dispute that in China all forms of gambling are illegal and severely punished. In August 2019, the Chinese embassy in Manila officially announced that “according to Chinese laws and regulations, any form of gambling by Chinese citizens, including online-gambling, gambling overseas, opening casinos overseas to attract citizens of China as primary customers, is illegal.”

Pagcor knows full well that all forms of gambling are illegal in China. If Pogo applicants submitted licenses from the Chinese government, these licenses are obviously fake. Still, Pagcor has allowed some 60 Pogos to operate in the Philippines in violation of Pagcor’s own rules.

Third, in the Philippines the general rule is any form of gambling is illegal and punishable under Article 195 of the Revised Penal Code. The exception to this rule is a special law that expressly authorizes gambling. One such exception is Pagcor’s Charter which expressly authorizes Pagcor to license gambling “within the territorial jurisdiction of the Philippines.” Pagcor’s Charter, however, does not authorize it to allow the licensee to operate outside of the Philippines. Moreover, the licensee’s Pogo license from Pagcor is void from the start because the licensee can never comply with Pagcor’s requirement of a gambling license from China. The gambling operations of Pogos, with gambling tables in the Philippines and online clientele from mainland China, thus fall under the general rule and are illegal under the Revised Penal Code.

Fourth, under the Cybercrime Prevention Act, all crimes under the Revised Penal Code “committed by, through and with the use of information and communications technologies shall xxx be imposed xxx one (1) degree higher” penalty than that provided in the Revised Penal Code.

The operations of Pogos are without doubt illegal. The mystery is that these operations are facilitated by the easy grant of Pagcor licenses, the adoption of visa upon arrival policy, the special escorts for arriving Pogo workers at the airport, and now the resumption of Pogo operations ahead of other businesses shut down due to COVID-19. It is apparent that there is an invisible hand orchestrating the activities of Pogos in the Philippines.

In China, while the authorities have clearly declared online gambling illegal and punishable, the mystery is that Chinese authorities have not blocked their citizens from accessing the websites or IP addresses of Philippine Pogos. The infamous Great Firewall of China could easily block such access. The fact that Chinese authorities have not done so shows an invisible hand orchestrating the activities of Pogos in the Chinese mainland.

The operations of Pogos in the Philippines and China are obviously well-synchronized. What could be the quid pro quo between the Filipino invisible hand and the Chinese invisible hand in allowing clearly illegal gambling activities to flourish symbiotically in the Philippines and China?

acarpio@inquirer.com.ph