PAGCOR to Ban POGO Hubs as Lawmakers Drag Feet on Permanent Ban
The Philippine Amusement and Gaming Corp (PAGCOR) has announced a forthcoming ban on Philippine Offshore Gaming Operators (POGO) hubs. This move comes amidst a protracted delay in legislative action for a permanent ban.
PAGCOR chair and CEO Alejandro Tengco in his office. (Source: Reuters)
LISTEN TO THIS ARTICLE:PAGCOR's chair and CEO, Alejandro Tengco, disclosed the new policy during a Senate inquiry into the illegal activities of POGOs, now rebranded as Internet Gaming Licensees (IGLs). Tengco emphasized the agency's commitment to stringent oversight of the 43 licensed POGO firms still operational in the country, with "24/7 teams" set to monitor their activities closely.
Related: The Philippines Moves Closer to Banning Entire POGO Gaming SegmentThe decision to prohibit POGO hubs, although not explicitly defined during the hearing, aligns with increasing demands from various political groups for a total ban on POGOs. Tengco acknowledged PAGCOR's readiness to support any directive from Congress and President Ferdinand Marcos Jr. regarding the implementation of such a ban.
The Senate hearing also shed light on the lobbying efforts of former presidential spokesperson Harry Roque for the POGO firm Lucky South 99 Inc. in July 2023. Following a raid for suspected human trafficking and other illicit activities, it was revealed that the firm had accumulated $500,000 in unpaid license fees.
Despite the mounting pressure for a ban, discussions among cabinet officials in the Philippines have yet to address the issue. Calls for the prohibition of POGOs have been echoed repeatedly by various elements within the nation's political sphere.
However, Arsenio Balisacan, Secretary of the National Economic and Development Authority (NEDA), indicated that the topic of banning online licenses has not been broached in cabinet discussions, as reported by the Manila Bulletin. This is in stark contrast to the legislative efforts underway, with several bills aimed at discontinuing the online gaming segment.
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Fiscal Dilemmas
The scenario presents a complex challenge for the Philippine government, balancing the economic benefits derived from POGOs against the social and legal issues they have engendered. The POGO industry has been a significant source of revenue, but it has also been associated with a range of criminal activities, including illegal employment and exploitation.
POGOs contributed approximately PHP53.1 billion (US$910 million) in 2022, which is 0.31% of the Philippines’ gross domestic product (GDP). This figure includes operational expenses, salaries, and benefits of employees, as well as office rent. However, the industry has seen a decline from its peak in 2019 when it accounted for 0.67% of GDP.
From a tax collection perspective, the benefits are diminishing, with total POGO taxes in 2021 reaching PHP7.38 billion (US$126.5 million), lower than the previous years. Should the Philippines decide to complete ban POGOs, the Philippines could lose as much as PHP64.6 billion (US$1.1 billion) in direct economic contributions, which accounts for 0.3% of GDP.
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