With the Philippine Gambling Ban in Effect, Can Laos Fill the Void?
菲律宾博彩禁令生效,老挝能否填补空白?”联系开站 …
Recently, the issue of the Philippine gaming license has affected the entire industry. Today, TC-Gaming will talk to you about the development of the Philippine IGL gaming license in the past and present. The gambling industry in the Philippines has a long history, and its development can be traced back to the early20th century. The earliest forms of gambling included cockfighting (Sabong), horse racing, and small casinos, which gradually occupied an important position in the lives of the Filipino people. Gambling in the Philippines is not only a form of entertainment, but also a cultural custom. For example, there is a custom of“gambling in the funeral hall”in the Philippines, where everyone gathers together to play cards at a funeral. In this case, gambling is“legal”. Some people even derive the business of buying and selling corpses in order to open a gambling game, which is jaw-dropping.
1. Historical background of the gambling industry in the Philippines
Early forms of gambling
The gambling tradition in the Philippines can be traced back to the early 20th century, with cockfighting (Sabong), horse racing, and small casinos being the earliest forms of gambling. These activities were deeply loved by the Filipino people and gradually became part of cultural customs. For example, at funerals in the Philippines, people often gather together to play cards, and gambling in this case is considered legal. This custom of “gambling in the funeral hall”reflects the deep roots of gambling in Philippine society.
1977: Passage of the Philippine Gambling Act
In response to the increase in illegal gambling activities, the Philippine government passed the1977Philippine Gambling Act and established thePhilippine Amusement and Gaming Corporation, PAGCOR. This agency·was signed by then-President Ferdinand Marcos Sr.and began to regulate and manage the gambling industry, promoting the legalization of the gambling industry.
2. PAGCOR's Establishment and Operation
PAGCOR's Establishment
PAGCORwas established to combat the growing number of illegal gambling activities and to increase government revenue through legalization and regulation. In1977President Ferdinand Marcos signed·presidential decree (PD1067-A) to formally establishPAGCOR. Its main tasks include regulating, operating, authorizing, and licensing card games, number games, and especially casino games in the Philippines. In addition, PAGCORis also responsible for generating revenue for the government's social livelihood and national development programs, and assisting in promoting tourism in the Philippines.
PAGCOR's Main Mission and Function
According to its charter, PAGCOR is given three main missions:
1. To regulate, operate, authorize, and license gambling activities, including card games, number games, and casino games.
2. To generate revenue for the Philippine government's social livelihood and national development plans.
3. To promote the development of the Philippine tourism industry.
PAGCOR's operating model PAGCOR's operating model includes directly operating casinos as well as authorizing and licensing private companies to operate gambling activities. PAGCOR-operated casinos are spread across the three main islands of the Philippines, with branches in Metro Manila, Luzon Island, Visayas, and Mindanao. These casinos not only attract a large number of tourists but also create local jobs. PAGCOR 's revenue distribution According to its charter and applicable laws, PAGCOR's revenue distribution is as follows: 1. 5% goes to the Bureau of Internal Revenue (BIR) as excise tax revenue. 2. 50% of the remaining 95% is distributed to the National Treasury as statutory revenue of the national government. 3. Cities that host PAGCOR casinos receive a fixed amount to be used for community development projects. 4. PAGCOR pays corporate income tax, in accordance with the National Internal Revenue Code. 5. 5% after excise tax and the national government's share of revenue goes to the Philippine Sports Commission to support the country's sports development program. 6. 1% of the net revenue goes to the Claims Committee under the Department of Justice to provide compensation to victims of wrongful detention and prosecution. Additionally, PAGCOR is used to finance the implementation of important laws such as the Early Childhood Care and Development (ECCD) program, as well as sports incentives and benefits by providing prize money to athletes. Under Republic Act No. 7656 or the “ Dividend Act, ” PAGCOR distributes at least 50 percent of its annual net income as dividends to the national government.
3. Amendments to the legal framework for PAGCOR's continued development In 2007, the Philippine Congress passed Republic Act No. 9487, which extended PAGCOR 's corporate life by 25 years and amended its charter. These amendments included allowing PAGCOR to enter into agreements, including joint ventures, with any person, company, association, or organization. This change allowed PAGCOR to have more flexibility in managing and developing the gambling industry.
PAGCOR's Revenue Contribution
PAGCORs the third largest revenue source for the Philippine government, after the BIR (Bureau of Internal Revenue) and the (Bureau of Customs). Its revenue mainly comes from casino operations, license issuance, and gaming taxes. PAGCOR 's revenue distribution includes providing funds to the National Treasury for community development projects, sports development programs, and other government projects.
Establishment of CEZA
The Cagayan Economic Zone Authority (CEZA) was established in 1995 to promote economic development in the northern part of Cagayan Province. CEZA was established under Republic Act No. 7922, or the Cagayan Special Economic Zone Act. Its main objective is to attract domestic and foreign investors to invest in the Cagayan Special Economic Zone by providing a favorable investment environment.
Main functions of CEZA
1. Attract and promote investment: Attract domestic and foreign investors by providing tax incentives and other incentives.
2. Infrastructure construction: Promote the development of infrastructure in the economic zone, including ports, roads, power and communication facilities.
3. Supervision and management: Supervise and manage all corporate activities in the economic zone to ensure their compliance operations.
Issuance of iGaming licenses
In early 2000, CEZA began issuing iGaming licenses, allowing licensed operators to operate iGaming businesses within the Cagayan Economic Zone. CEZA's iGaming licenses are called "First Cagayan" licenses. These licenses allow operators to provide iGaming services to customers outside the Philippines, as long as they do not involve Filipino gamblers.
Attracting foreign investment
Due to the favorable regulatory environment and tax incentives provided by CEZA, a large number of iGaming operators have flocked to the Cagayan Economic Zone. These operators mainly target gamblers from China and other Asian countries, taking advantage of the Philippines' relaxed regulations and convenient geographical location to conduct business. This policy has not only attracted a large amount of investment but also driven local economic development and employment opportunities.
Rapid Development of the Industry
With the development of Internet technology and the popularity of iGaming, CEZA's iGaming license has quickly become popular. A large number of operators have chosen to set up bases in the Cagayan Economic Zone, which has promoted the rapid development of the local economy. However, the rapid expansion of this industry has also brought a series of problems, including illegal gambling activities, money laundering, and other criminal acts.
Changes in 2017
In 2017, CEZA lost its exclusive authority over iGaming licenses. Under the new regulations, CEZA retains the power to issue licenses, but its original master licensees, First Cagayan Leisure and Resort Corporation (FCLRC) and North Cagayan Gaming and Amusements Corp (NCGAC), no longer have exclusive rights. The move is intended to increase government revenue by bringing in more competitors to improve regulatory efficiency and transparency (the development) (Legal Online Gambling) (5 Star iGaming Media)。
Status Quo
Despite losing its exclusivity, CEZA continues to issue and manage iGaming licenses and plans to further attract foreign investment and boost the local economy by developing new infrastructure projects, such as a ten-hectare online park (the development) (Legal Online Gambling)。
CEZA is still issuing iGaming licenses, but its role has changed from exclusive licensor to non-exclusive licensor. Through this adjustment, CEZA hopes to enhance market competition, compliance, and transparency in the industry while retaining regulatory and licensing powers.
1. POGO's establishment
2016: President Duterte’s policies
2016, the year when·The PresidentRodrigo Dutertetook charge, the Philippine government established the (Philippine Offshore Gaming Operators, POGO) to attract more international gambling operators to set up bases in the Philippines and to regulate and tax them.PAGCORbecame the main agency that managed and issuedPOGOlicenses.
POGO's Issuance of Licenses
POGO's licenses is intended to regulate and manage iGaming activities, ensure that operators operate legally, and generate tax revenue for the Philippine government. This policy has attracted a large number of iGaming operators, especially those targeting gamblers from China and other Asian countries.
2. POGO's Rapid growth
The explosive growth of the industry
POGO's establishment has driven the explosive growth of the iGaming industry in the Philippines. A large number of Chinese people went to the Philippines to engage in the gambling industry, which led to the development of the local real estate market and other service industries. Many Chinese people rented or purchased a large number of properties for office and residence, pushing up local housing prices. At the same time, service industries such as catering and transportation also prospered due to the influx of a large number of foreigners.
Economic impact
POGO's industry's prosperity has brought a lot of foreign exchange income and tax revenue to the Philippines and also created a large number of jobs. However, the rapid expansion of this industry has also caused a series of controversies and regulatory issues.
3. POGO's Negative impact
Negative impact on China
POGO's industry's prosperity has brought huge negative impacts to China. A large number of iGaming platforms have taken advantage of the loose regulatory environment in the Philippines and developed a large number of iGaming customers targeting Chinese gamblers. The rise of these platforms conflicts with China's domestic policy of prohibiting online lottery sales, causing many Chinese citizens to fall into gambling debts and financial crises.
Rampant criminal activities Since the establishment of POGO, criminal activities related to it in the Philippines have become increasingly rampant. According to data from the Philippine National Police (PNP), there has been a significant increase in POGO-related kidnapping cases between January and September 2022, with a total of 17 cases reported. The victims of these cases are mainly Chinese citizens, as well as a small number of Vietnamese, Malaysian, and Taiwanese citizens. In addition to kidnapping, human trafficking, financial crimes, and even illegal collusion with law enforcement agencies are also common.
Decline in social security
These criminal activities have seriously affected the sense of security in Philippine society and damaged the international reputation of the Philippines. AlthoughPOGOs once boosted the real estate market, the high housing prices after the rise have made it difficult for ordinary Filipinos to afford them, further triggering social dissatisfaction.
1. POGOban
President Marcos' Ban On July 22, 2024, Philippine President Ferdinand Marcos Jr. announced a ban on all POGOs effective immediately, requiring PAGCOR to end and seal up POGO operations by the end of the year. The decision came after the Senate investigated illegal activities related to POGOs. The ban was supported by the Department of Finance ( DOF ) and the National Economic and Development Authority ( NEDA ).
PAGCOR’s response
PAGCORChairman and CEO Alejandro TengcoAlejandro Tengco said that in the future, offshore gambling operators will no longer be called POGOs, butInternet Gaming Licensees(IGL). This name change is intended to eliminate the negative " stigma " ofPOGOs and promote“污名”,并在新的监管框架下推动更透明和规范的赌博行业。
1.1. Announcement and Establishment
1. Announcement time: PAGCOR (Philippine Amusement and Gaming Corporation) first announced the renaming of Philippine offshore gaming operators (POGOs) to IGLs in July 2023. This move was to address various issues in the POGO industry and improve industry transparency and compliance through a new name and regulatory framework.
2. Specific changes: In August 2023, PAGCOR reviewed all existing POGO license holders and required them to reapply for licenses under the new Internet gambling licensing regulations. These regulations require higher capital requirements and introduce stricter review procedures to ensure the legality and compliance of operators.
3. First issuance of licenses:: As of May 2024, PAGCOR has issued formal IGL licenses to 40 offshore gaming operators, and 9 are still in provisional license status (Asia Gaming Brief) (Asian Gaming Magazine) (Asian Gaming Magazine) (Philstar.com) (Manila Shaker)。
Objectives
The main objectives of introducing IGLlicenses include:
1. Improve transparency: Ensure industry transparency through stricter supervision and information disclosure.
2. Reduce illegal activities: Strengthen the supervision of licensed operators and crack down on illegal gambling activities.
3. Protect social security: Reduce social problems related to gambling through standardized management.
2. IGLliencese's issuance and conditions
What the new regulations say:
1. Capital requirements: The new Internet gambling licensing regulations require licensed operators to have an authorized capital of at least P100 million, of which P25 million must be paid-in capital. This requirement is much higher than the previously authorized capital of P15 million and paid-in capital of P3 million (Philstar)。
2. License validity period: The new IGL license is valid for two years and only applies to specific locations. If the operator operates at another address, the license will be invalid (Philstar)。
3. Transparency measures: PAGCOR has pledged to make public the list of all legal operators and the links to the websites they operate through its official website and various media channels. This measure is intended to crack down on illegal operators and ensure that the public can clearly identify legal gambling platforms (Asian Gaming Magazine) (Philstar)。
Re-application and review
All existing POGOoperators must re-apply forIGLlicenses.PAGCORconducts a rigorous review of applicants to ensure that they meet the new regulatory standards (Asian Gaming Magazine) (BusinessMirror) . This process is intended to filter out non-compliant operators and improve the overall quality of operations.
License quantity limit
PAGCORplans to issue55to65ofIGLlicenses. This limit is intended to ensure that the regulator can effectively manage each licensed operator (Manila Shaker) :
Application conditions Companies applying for an IGL license must meet a number of conditions, including 1. Provide detailed company information and operating plans. 2. Ensure that shareholders and management have no criminal records. 3. Submit financial reports and proof of funds to ensure sufficient financial strength. 4. Establish sound anti-money laundering and anti-terrorist financing measures.
Operational requirements Companies that obtain an IGL license must comply with the following operational requirements: 1. Submit operational reports to PAGCOR regularly and accept audits. 2. Ensure that all employees hold legal work visas. 3. Establish a compliance department to ensure that operations comply with laws and regulations. 4. Promote responsible gambling measures to protect the interests of players.
3. Supervision and enforcement of IGL licenses
Regulatory Mechanism PAGCOR has established a comprehensive regulatory mechanism, including: 1. Regular audits and on-site inspections to ensure compliance of operators. 2. Setting up reporting channels to accept public complaints and reports. 3. Monitoring the operation of iGaming platforms through technical means
Penalties PAGCOR will impose the following penalties on IGL-licensed operators who violate regulations: 1. Fines: for minor violations. 2. Suspension or revocation of licenses: for serious violations. 3. Criminal prosecution: for suspected criminal acts, they will be referred to judicial authorities
4. Future prospects of IGL license
Industry standardization and transparency With the introduction of the IGL license and the implementation of the new regulatory framework, the Philippine offshore gambling industry is expected to achieve more standardized and transparent operations. This will help reduce illegal activities and enhance the Philippines' international reputation (Asian Gaming Magazine) (Manila Shaker).
Economic and social impact Under the new regulatory framework, legal IGL operators will be able to conduct business in a fair and transparent environment, bringing stable tax revenue and employment opportunities to the Philippines. At the same time, PAGCOR will continue to fund social welfare projects and promote tourism development, making positive contributions to the economic and social development of the Philippines (Asian Gaming Magazine) (BusinessMirror).
5. Prohibition and discussion of IGL license
As of now, there are multiple discussions about the ban on IGLs:
Senate Discussion: Senate Bill 1281, pushed by Senator Joel Villanueva, proposes a total ban on all forms of iGaming, including IGLs. Villanueva pointed out that POGO and IGL operators are involved in criminal activities such as human trafficking, fraud, and kidnapping, and therefore should be completely banned (Asian Gaming Magazine)。
PAGCOR's Position: PAGCOR Chairman Alejandro Tengco said that a total ban on IGLs could cause legal operators to go underground, making supervision and enforcement more difficult. He believes that the disappearance of legal operators will lead to more rampant illegal activities and cost the government about 20 billion pesos in tax revenue each year (GMA Network | News and Entertainment ) (Philstar.com)。
6. Verification of news sources
According to reports from GMA News, Philstar, and Daily Tribune, there are differences in the positions of PAGCOR and the Philippine government. PAGCOR prefers to control the industry through stricter regulations rather than banning IGLs outright. However, some members of Congress and the Senate are advocating for a total ban to deal with related criminal activities (Asian Gaming Magazine) (GMA Network | News and Entertainment ) (Daily Tribune)。
The Philippine gambling industry has developed from traditional forms to modern iGaming and has undergone many policy adjustments and regulations. With the rapid expansion of the POGO industry, related criminal activities and social problems have also increased. In order to meet these challenges, the Philippine government decided to ban POGOs completely and introduce IGL licenses. Under the new regulatory framework, the Philippine gambling industry will move towards a more standardized and transparent direction, ensuring that legal operators can operate under clear rules. This approach is also to reduce illegal activities and protect national social security and international reputation.
菲律宾博彩禁令生效,老挝能否填补空白?”联系开站 …
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