With the gradual implementation of the strict regulation and ban of the Philippine government on the offshore gambling industry, the gambling landscape in Southeast Asia is quietly changing. The once prosperous Philippine Offshore Gaming Operators (POGO) are now facing unprecedented challenges, and many gambling companies have to find new safe havens. At the same time, Laos, a country located in the heart of Southeast Asia, is becoming a potential destination for the transfer of the gambling industry with its unique geographical advantages and increasingly open policies. This article will delve into the background of the Philippines' suspension of offshore gambling licenses and its far-reaching impact on the industry, analyze how Laos has become a new gambling hotspot, and explore the potential impact of this trend on the economic and social development of the Southeast Asian region. Against the backdrop of the ever-changing global gambling landscape.

Background of the development of the iGaming industry in Laos

In recent years, the Lao government has gradually moved towards the regulation of iGaming, planning to develop its iGaming industry through a model similar to the Philippines' POGO (Philippine Offshore Gaming Operator). Laos' iGaming regulation aims to attract operators whose target markets are mainly located in Southeast Asia (such as Thailand) through a licensing system. This move is mainly to make up for the loss of revenue caused by the epidemic to Laos' physical gambling industry while cracking down on illegal iGaming activities.

Background and time of establishment

Laos' iGaming license plan was proposed around 2023, with the main purpose of responding to the impact of the COVID-19 epidemic on the physical gambling industry and cracking down on illegal iGaming activities at home and abroad. At present, the plan has not yet been fully legislated, but relevant regulations are being formulated.

License Types and Regulations

Laos plans to adopt a two-tier licensing structure: Master License and Sub-license. Master licenses will be issued to a small number of companies, which can then sub-license to more businesses. This model is similar to the gambling licensing system in the Philippines and Curacao, which aims to expand industry coverage through licensing outsourcing mechanisms.

Differences from the Philippine POGO model

Although Laos’ iGaming licensing system is based on the Philippines’ POGO model, it differs in some aspects:

• Target customers:Laos’ iGaming licenses are mainly aimed at non-Chinese markets, such as Thailand or other Southeast Asian regions, to avoid diplomatic conflicts with China.避免与中国的外交冲突。

• Regulation and taxation: Laos’ tax structure may be more attractive than the Philippines to attract more operators. In addition, Laos hopes to speed up the introduction of foreign workers through fast work permit processing.

Legislation and effective date

As of 2024, the Lao government is still developing and improving laws and regulations related to iGaming. It is expected that these regulations will be formally passed into law and begin to be implemented in 2024 or later. The specific effective date will depend on the progress of the legislative process.

Local Language

In Laos, Lao is the official language and the mother tongue of most locals. Lao belongs to the Tai-Kadai language family and is very close to Thai, so Lao people can usually understand Thai, especially in border areas and those who are exposed to Thai through the media.

Usage of Chinese and English:

• Chinese: Due to the increase in Chinese investment in Laos in recent years and the closer economic cooperation between Laos and China, the use of Chinese has increased, especially in the business and tourism sectors. In addition, some Lao people will learn Chinese to better communicate when working with Chinese companies or working in the tourism industry.

• English:English is a limited language in Laos, mainly used in education, international organizations, and some tourism industries. Compared with Chinese, English is more widely used among young people and those with higher education, especially in large cities such as Vientiane and Luang Prabang.

Average cost of living in Laos in 2024

Price Overview

The cost of living in Laos is relatively low but will vary depending on the city and lifestyle. Here are some key cost of living and price information:

Overall living expenses

The cost of living in Laos depends on the city you live in and your personal lifestyle. In major cities like Vientiane, the cost of living is higher, while in smaller cities like Luang Prabang or Pakse, the cost of living is relatively lower. In most cases, you will need around USD 1000 to 2000 (approximately LAK 11,000,000 to 22,000,000) per month to live comfortably.

Housing and rent

• Rent in the city center:In major cities such as Vientiane, the rent for an 85 square-meter apartment in the city center is about 36,848,500 Lao Kip.
• Rent in the suburbs: In non-city center areas, the rent for a similar-sized apartment is about 11,963,400 Lao Kip.
• Utility costs: The average monthly utility bill for a two-person household is about 300,000 Lao Kip.

Food & Groceries

• Food: A lunch in the commercial area costs about 94,647 Lao Kip, and a meal at a fast food restaurant (such as a Big Mac) is about 75,353 Lao Kip.
• Basic food: For example, 1 liter of milk costs 14,750 Lao Kip, 12 eggs are about 11,000 Lao Kip, and 500 grams of boneless chicken breast is about 18,750 Lao Kip.

Other living expenses

• Transportation:  Local transportation costs are low, with a monthly ticket costing around 330,000 Lao Kip. If you choose to rent a motorbike or car, the cost will increase accordingly.
• Entertainment and leisure: For example, a cinema ticket costs around 50,700 Lao Kip and a regular haircut costs around 16,800 Lao Kip.

Prices of imported goods

Imported goods and Western lifestyle items are more expensive in Laos. For example, a bottle of premium red wine is around 159,294 Lao Kip, while a pair of branded sneakers can cost up to 1,000,000 Lao Kip.

Potential economic contribution to Laoag

If Laos successfully passes and implements iGaming license legislation, it could experience significant economic growth, based on the experience of the Philippines after the introduction of POGO (Philippine Offshore Gaming Operator) licenses. The following are several key areas of impact and possible economic growth estimates:

Direct economic contribution

Since the introduction of POGO licenses in the Philippines, the direct economic contribution of the gambling industry has increased significantly. For example, in 2019, the POGO industry in the Philippines brought the government approximately 6.2 billion pesos in tax revenue. If Laos can successfully replicate a similar model, the direct economic contribution of its gambling industry may account for a certainpercentage of GDP, which will depend on the scale of license issuance and market response.

Foreign investment pours in

The introduction of POGO licenses has attracted a large amount of foreign investment into the Philippines, especially in real estate,
services, and infrastructure construction. Laos may also experience a similar influx of foreign investment after the implementation of the
licenses, which will not only drive the growth of related industries but also promote employment and infrastructure improvements.

Career Opportunities

The gambling industry in the Philippines provides a large number of jobs for local and foreign employees. The operation of POGO has attracted a large number of foreign employees, further promoting the development of the local service industry. If Laos introduces similar licenses, it is expected to create a large number of jobs, especially in the fields of technology, customer service, and management.

Real Estate Market

The Philippines’ real estate market experienced rapid growth during the POGO boom, especially in major cities such as Manila. Property prices and rents rose significantly as foreign employees and companies needed office and residential space. Major cities in Laos, such as Vientiane, may also experience a similar real estate market boom.

Driving force from surrounding industries

The development of the gambling industry usually drives the growth of other related industries, including catering, transportation, entertainment, financial services, etc. The experience of the Philippines shows that the gambling industry can significantly boost the growth of the service industry, which will be an important economic growth point for Laos.

Economic Growth Forecast

If Laos' iGaming license legislation is passed, it is expected that in the next few years, the country's economic growth may rely to a certain extent on the contribution of the gambling industry. Based on the experience of the Philippines, the introduction of the gambling industry may bring about an additional growth of about 1-2% to GDP, depending on the scale of the industry, the regulatory environment, and the market response.

Possible difficulties

Legal and regulatory uncertainty: Although Laos is in the process of formulating relevant iGaming laws and regulations, gambling companies may face legal and regulatory uncertainty as the legislation has not yet been fully passed. This includes frequent policy changes, immature regulation, and delays or instability in the issuance of licenses.

Infrastructure limitations: Laos’ infrastructure may not be as complete as other countries such as the Philippines, especially in terms of Internet, communications, and transportation. This may affect the operational efficiency and customer experience of iGaming platforms.

Market and labor limitations: Laos has a small labor market and lacks professional skills. The technical talents and customer service personnel required by the gambling industry may be insufficient, and gambling companies may need to invest more resources in training and technical support. In addition, the local market in Laos is small, and operators mainly rely on external markets, such as neighboring countries such as Thailand, making market expansion difficult and risky.

Cultural and language barriers: The main language in Laos is Lao, and although the use of Chinese and English has increased in recent years, the language barrier compared to China and the Philippines can pose challenges in the management of expatriate staff and customer service.

Possible opportunities

Policy incentives and tax advantages: Laos may attract foreign investment by formulating policies that are favorable to the gambling industry, such as lower taxes and a more relaxed regulatory environment. These measures will help reduce operating costs and improve competitiveness.

Emerging Market Potential: As an emerging market, Laos may offer under-exploited gambling opportunities. By establishing a base in Laos, gambling companies can capture this new market, especially neighboring markets in Southeast Asia such as Thailand and Vietnam.

Lower cost of living: The cost of living in Laos is relatively low compared to the Philippines. This may reduce a company’s operating costs, including employee salaries, office space rental, and daily expenses, thereby increasing profit margins.

Geostrategic location: Laos is located in the center of Southeast Asia, adjacent to China, Thailand, Vietnam, and other countries, with a superior geographical location. As a regional center, Laos can easily connect to these countries and expand the gambling market.

Summary

Laos' iGaming license program is gradually attracting iGaming operators from Southeast Asia, especially Thailand and the Philippines, to promote the country's economic recovery. The Lao government hopes to compete with the Philippines and regulate the domestic gambling market by offering more attractive conditions, such as lower operating costs and fast work permit processing. However, the program is still in the development and legislation stage, and the government has not yet officially issued the name, specific conditions, and specifications of the license.

Although gambling companies relocating to Laos may face many challenges such as legal uncertainty, insufficient infrastructure, and market limitations, Laos also provides new opportunities for the gambling industry. Favorable policies, huge potential for untapped markets, and low operating costs make Laos have the potential to become an emerging gambling center after the Philippines. If the Lao government can successfully pass and implement iGaming regulations and provide the necessary support to the industry, Laos may occupy an important position in Southeast Asia's offshore gambling industry.