What is a POGO?
A Philippine Offshore Gaming Operator (POGO) is an online gambling business based in the Philippines that caters to foreign customers, particularly those from China and these POGOs in the Philippines have been operating since 2003.
The government regulated these companies under President Rodrigo Duterte in 2016, generating substantial revenue, in terms of taxes and license fees for the government. These taxes and license fees usually reach in billions of pesos every year. These POGOs also employ thousands of workers.
POGOs often occupy mid- to high-rise buildings and employ thousands of workers and huge numbers of desktops and servers.
Here is an interesting fact: the Philippine Amusement and Gaming Corporation (PAGCOR) does not allow any individual in the Philippines, regardless of citizenship, Filipino citizens regardless of location, and potential patrons in countries and territories where offshore gambling is illegal from availing of POGO services. Failure to do so risks license revocation.
Only residents of countries where offshore gambling is allowed can avail of POGO services.
While a significant portion of the Philippine offshore gambling industry caters to the Chinese, some serve the Korean and Vietnamese markets.
What are the different licenses given to POGOs?
The PAGCOR says there are three license categories for POGOs in the Philippines: Category 1 involves services that have live streaming with women serving as online gambling dealers.
Category 2 and 3 are sub-sectors of business process outsourcing (BPO) which provide back office support.
The IT and Business Process Association of the Philippines (IBPAP) categorically distinguishes POGOs from the business process outsourcing (BPO) sector. Unlike BPOs, which are regulated by the Philippine Economic Zone Authority (PEZA) or the Board of Investments, POGOs operate under a license from the Philippine Amusement and Gaming Corporation (PAGCOR). Due to these fundamental differences in regulatory oversight and business nature, IBPAP does not consider POGOs as part of the BPO industry.
PAGCOR data reveals a significant decline in POGO licensees. From a peak of nearly 300 operators in 2019, the industry contracted to around 75 active POGOs by the end of 2023 due to tightened regulations.
By the numbers
The Department of Finance (DoF) said combined taxes collected from POGOs from 2017 to October 2022 reached P53.8 billion. The breakdown includes P30 billion by PAGCOR, while P23.8 billion has been collected by the BIR, since 2018.
In 2019, reports said POGOs occupied 386,000 square meters (4,150,000 sq ft) os office space in the Philippines. POGOs also became the biggest market for new office space in Metro Manila with 12% of the whole office market. Annual rents have reached $219 million for commercial, and $680 million for residential.
Thus, there have an influx of foreigners snapping up prime real estate in many commercial locations across Metro Manila.
President Marcos declares ban on POGOs in the Philippines
In his third State of the Nation Address on July 22, President Ferdinand Marcos Jr. banned POGOs saying that POGOs have already “ventured into illicit areas furthest from gaming, such as financial scamming, money laundering, prostitution, human trafficking, kidnapping, brutal torture, even murder.”
“The grave abuse and disrespect of our system must stop. It is now imperative to stop this chaos that is wreaking havoc to our society and desecrating our country. Effective today, all POGOs are banned,” Marcos exclaimed prompting the crowd at the Batasan Pambansa in Quezon City to break into cheers.
The President also ordered the PAGCOR to cease operations of POGOs by the end of the year, as well as the Department of Labor and Employment to help workers who will be displaced.
Calls to ban POGOs
Finance Secretary Ralph Recto and Socioeconomic Planning Secretary Arsenio Balisacan, key figures of the administration’s economic team, have supported the calls to ban POGOs, which mostly cater to clients from mainland China and employ a large number of Chinese-speaking foreign workers.
Several lawmakers and business groups have also urged the President to impose a total ban on POGOs.
Aside from money laundering activities, crimes attributed to the POGOs have expanded over the past years and now include human trafficking, abduction, homicide, illegal detention, kidnap-for-ransom, theft, robbery-extortion, serious physical injuries, swindling, grave coercion, investment scam, cryptocurrency scam, and love scam.
These irregularities have prompted both chambers of Congress to investigate the illicit activities hounding online gambling firms.
PHOTO CREDIT: GMA News Online. https://www.msn.com/en-ph/news/national/pagcor-hands-off-in-local-permit-issuances-to-pogos/ar-BB1nCl0q
Additional source: PNA. https://www.pna.gov.ph/articles/1229505
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