Betting on online gaming

By Rey Gamboa (The Philippine Star), May 23, 2017

We’ve been hearing lately exuberant statements from Philippine Amusement and Gaming Corp. (Pagcor) officials about the prospects of online gaming for the Philippines, months after it denied the renewal of Philweb Corp.’s license, which then operated the largest network of electronic gaming outlets in the country.

With Philweb sidelined, Pagcor apparently took over the reins and has been busy granting licenses to online gaming operators locally. It is now in the process of reviewing requests from foreign operators.

Pagcor expects to raise some P3 billion in tax revenues for the Philippine government this year from newly-granted local online gaming permits, and is looking forward to doubling its collection with enhanced auditing systems and operations procedures.

The potential will be even more enhanced, according to Pagcor officials, as it prepares to grant more licensing requests, this time to offshore-based operators largely from the United States and Europe who have wanted to set up their base of operations in the Philippines.

While the license payment for a Philippine Offshore Gaming Operators (POGO) permit is still currently a fixed amount, Pagcor is looking forward to enhancing its tax collections from online operators when it shifts its taxation based on actual gross gaming revenues.

No borders

Online gaming (or gambling) is now considered a potentially lucrative industry that runs into billions of dollars a year in a wide range of segments including e-casino and sports betting, two areas where Pagcor is more keenly interested in.

Many casinos, poker rooms, sportsbooks, and gambling firms now operate on the internet using software that simulate a gambling environment, but allow players to play in the comfort of their own homes.

Particularly for e-casinos, online gaming operators are able to offer just about any game you can find in a brick and mortar casino, such as slot machines, craps, blackjack, roulette, lottery, video poker and keno. Some sites even offer virtual real time poker play with real opponents from around the world.

Betting on sports, on the other hand, allows real money gambling on the outcome of sporting events such as football, baseball, professional and college basketball, soccer, MMA, and even the World Cup.

While online gaming is still a fragment of the whole gambling/gaming industry, especially with the attraction offered today by sophisticated gaming and leisure destinations, there are new technological changes that promise additional revenue potential for online operators.

These days, you can bet on just about anything else online. You can bet on who will win reality shows like The Amazing Race, Dancing with the Stars, or Survivor. More recently, some sites on fantasy sports have been offering real money daily, and have been generating a lot of attention.

Support for China’s anti-corruption drive

The Philippines’ increased foray in online gaming is a welcome move that corresponds with its aggressive stance to rival more established gaming destinations in Asia like Singapore and Macau. It also comes at a time when the Philippines and China are trying to bridge better relations.

China is considered a big market in the gaming industry, and a recent clampdown by Chinese authorities against what it deemed were corrupt officials who had been lured into high stakes gambling in Macau, currently the biggest gaming center in Asia, has shaken the former Portuguese colony’s prospects.

Something that would perhaps be deemed as an expression of support for the Chinese’s anti-corruption drive, the Philippine government has been issuing its own official edicts that discourage corruption in the gaming industry.

Recently, the Philippine Economic Zone Authority (PEZA) shuttered its doors to all online gaming firms, even those that claim to simply engage in technical support, so that any potential incident of illegal online gaming could be avoided.

Previously, some illegal online operators were suspected to be operating in export processing zones disguised as business processing operations (BPO). An executive order issued by President Duterte specifically targeted the existence of such fraudulent activities.

Hopefully, such a move — together with the continued overall declarations by the Philippine government to fight all forms of corruption — will bring the Chinese tourists to our shores.

Focus on regulatory functions

The appointment of Andrea Domingo by President Duterte as Pagcor chairman comes with overtures to reform, the four decades-old government-owned gaming corporation. Domingo has a reputation as a no-nonsense immigration chief during her term under former president Corazon Aquino.

Currently, Pagcor oversees and regulates privately owned casinos, bingo parlors, and e-games cafes operating in the Philippines while running its own casinos and several VIP slot clubs in major cities across the country.

This is perceived to be a weakness, especially after the much publicized hacking of the Bangladesh Central Bank, where $81 million was fraudulently stolen through the Philippine casino industry.

With the Philippine gaming industry growing, and in view of the Bangladeshi central bank scandal, the need for Pagcor to focus on its regulatory functions has been deemed as necessary and supportive of the overall campaign of the government to beef up its anti-money laundering initiatives.

It’s never too late to lift a page from the more affluent gaming and gambling territories in the world like Las Vegas where the regulator (Nevada Gaming Commission) is focused on its role of growing the industry through appropriate regulatory initiatives.