Ensuring sound regulation – instead of prohibition – of Philippine Inland Gaming Operators (PIGOs) that serve the domestic market, is the “responsible” way to address social concerns, while preserving the economic benefits from taxing it. That is according to Philippines-based gaming lawyer Marie Antonette Quiogue, in comments to GGRAsia.
Her remarks were in response to GGRAsia’s enquiry. Recently, Philippines Senate President Francis Escudero called for a “cost-benefit analysis” of PIGO licences to determine if they were a “destructive force” within domestic society, and should be banned. PIGO products are sometimes also referred to as “eGames” in the Philippines.
Ms Quiogue, a partner at Arden Consult with expertise in technology and gaming regulatory matters in the Philippines, told GGRAsia: “Senator Francis ‘Chiz’ Escudero’s call to review eGaming operations reflects a legitimate concern for public welfare.”
“Ensuring that any industry operates within a well-regulated framework is always a worthy goal.”
But she added: “With due respect, banning eGaming would not achieve this objective. Instead, it would drive the industry underground, creating more risks for both consumers and the economy.”
Land-based casino operators in the Philippines can apply to offer online gaming to domestic customers. The country’s casino regulator, the Philippine Amusement and Gaming Corp (Pagcor), typically refers to such operations as PIGO business.
As distinct from virtual online gaming formats, PIGO games need to be connected to physical gaming machines or gaming tables.
Concerns about criminality and financial risk that led to the country’s ban on Philippine Offshore Gaming Operators (POGOs) do not apply to PIGOs, the lawyer suggested.
“The nature of POGOs, which catered to foreign markets and operated with limited local oversight, made them susceptible to illicit activities such as fraud and money laundering,” remarked Ms Quiogue.
She added: “In contrast, eGaming operators registered [with Pagcor] are subject to stringent regulatory requirements. These include rigorous probity checks, anti-money laundering (AML) compliance, and robust know-your-customer (KYC) policies enforced not just by Pagcor, but also by banks and payment service providers.”
“Unlike POGOs, which received wagers from foreign players, locally-regulated eGaming operators conduct transactions within the country’s financial system, making oversight and tax collection significantly more effective. They are also required to be audited and certified by third-party providers, most of them operating within an international standard,” the lawyer also noted.
‘Huge’ taxpayers
Another contrast to the POGO practice was that locally-registered eGaming operators contribute substantially more to the Philippines’ public coffers, Ms Quiogue said.
“Under the previous POGO framework, operators were taxed at just 5 percent of gross income, with nearly half of the government’s collections coming from withholding taxes on foreign workers. Additionally, regulatory fees imposed by Pagcor on POGOs were only up to 2 percent. Collection was often difficult, as much of the revenue originated from abroad,” she said.
“Conversely, locally registered eGaming operators contribute substantially more. In my experience handling compliance matters in this sector, I have seen operators paying 25 percent to 35 percent of their gross gaming revenues directly to Pagcor, ensuring a more consistent and transparent revenue stream for the government.
“Because these operations are based within the country, transactions pass through licensed payment providers that are mandated to report and withhold appropriate taxes,” added the lawyer.
In a Thursday press briefing, Philippines Presidential Communications Undersecretary Claire Castro had mentioned the government recognised PIGOs as entities that “pay huge taxes”, and “have not caused crimes”, reported local media outlet the Philippine Star.
Nonetheless, the official noted that the government was studying the operations of PIGOs, and would not dismiss the possibility of banning them if they carried social costs in the manner of POGOs.
Ms Quiogue told GGRAsia regarding her reaction to that point: “Rather than restricting lawful operators, legislative efforts should focus on strengthening regulatory enforcement.
“Pagcor should be empowered to collaborate more effectively with other government agencies to identify and shut down illegal gaming activities.
“Ensuring that all operators comply with licensing requirements, AML [anti-money laundering] laws, and consumer protection standards is the best way to safeguard both players and the broader economy,” she added.
