Once a thriving (if controversial) industry in the Philippines, POGOs – or Philippine Offshore Gaming Operators – are now becoming a thing of the past.
Before the recent coronavirus pandemic, POGOs were a big moneymaker for the Philippine government.
Regulated by PAGCOR, POGOs allowed online gambling games to be hosted inside Philippines borders, though their clientele was restricted to players logging in from outside the country.
The biggest market for these POGOs, of course, was China, where all online gambling is prohibited (and Macau – the only region with legal Chinese gambling – is decidedly inaccessible for all but the wealthiest elites).
While China repeatedly asked President Rodrigo Duterte to close up shop on the POGO concept, Duterte never considered the requests.
The outlets simply made too much money for the PH government.
That all changed after COVID-19 reared its ugly head.
Facing repeated quarantines within Metro Manila and beyond – along with the indefinite closures of all the nation’s biggest land-based integrated resort casinos – PAGCOR revenues cratered over 95% year over year.
As a result, the state attempted to lean even harder on POGOs.
PAGCOR instituted a new tax scheme to charge these operators $10,000 per month in taxes for each online live dealer table, as well as $5000 per month for each electronic online slot machine.
In the best of times, these taxes might have been sustainable.
Alas, these haven’t been the best of times.
Of course, the impetus wasn’t just the coronavirus, but the simple fact that many POGOs were already skirting their full tax bills, and this increase was though to help pick up that slack.
Unfortunately, the weight of the pandemic meant that those gamblers whom POGOs were targeting in hard-hit regions like China and various Southeast Asia locales could no longer afford to wager as much or play as often.
As a result, most POGOs simply closed up shop.
Before COVID-19, there were – by some counts – as many as 200 operational POGOs in the Philippines. Of these, some 60+ were fully accredited.
Now, just over 30 accredited POGOs remain.
Naturally, those POGOs that left – many of them staffed by Chinese nationals who also left – didn’t exactly beat down the doors of PAGCOR’s collection agents to settle their tax discrepancies on the way out.
Ultimately, PAGCOR’s been shorted by about $27 million.
That said, this isn’t exactly bad news.
POGOs were great for the economy while they lasted, but the model – the new model – doesn’t have to be predicated on offshore gambling at all.
The Philippines has recently softened its stance on gambling in the islands from a domestic perspective.
Online casino games have been legalized within the last year, and while iGaming in the Philippines is currently limited to existing casino customers in good standing (i.e. so-called “VIP members”), it’s not a stretch to imaging that the market will expand to include rank and file Filipino gamblers who currently play online at offshore Philippines-friendly casinos, sportsbooks, and poker rooms.
Once that happens – once PAGCOR takes the reins and coordinates with existing domestic casino operators to roll out legal online gambling for all residents – all the benefits once brought to bear by POGOs will be similarly brought to bear by PIGOs.
PIGOs, or Philippine Inland Gaming Operators, have already commenced limited operations in the country.
With homegrown infrastructures and betting software on hand, there’s no reason that state-regulated domestic Internet gambling can’t be just as profitable – or even more profitable – than POGOs ever were.
Big picture: That $27 million might just be chump change after all.
And don’t forget to book your ticket to Boracay!