The Philippines announced their freeze on the development of casinos on January 11th forcing investors to look toward other countries as investment possibilities. Several countries have been flagged as great potentials for gambling investment and development, however, each has their pros and cons. If these countries were to begin to regulate and offer gambling licenses, then they could easily rival the Philippine gaming industry and its regulators for market share.
The Philippine’s is currently the only country in Asia who offers online gambling operator licenses issued by PAGCOR, under the identifying acronym POGO (Philippine Offshore Gaming Operator) and one of the few countries in Asia that permit land-based gambling. However, as per their announcement on limiting the number of gaming licenses, as well as, plans to implement higher taxing and licensing charges has made licensing through PAGCOR less attractive to do business with.
Other countries which investors may be looking at for gambling development may be more fruitful avenues than the Philippines in the long run considering the newness of the industry to the area, however, most governments need to create regulations for gambling before investors can even begin to think about building. One possibility close to home is Cambodia as the nation has experienced a boom in casino license issuance over the past eighteen months.
Over 100 gaming licenses have been issued by the Cambodian Government as operators begin to plan how they will conduct their business in the Southeast Asia nation. Along the coastal province of Sihanoukville, foreigners have come in swarms and investments from China and other countries are flooding the region due to the increased acceptance of gambling and implementation of gambling-friendly policies. To compete better for online overseas investment, Cambodia must design new regulations to better encourage online gaming operators to obtain a Cambodian gaming license.
Vietnam is another country which could explode with massive growth from casino gambling investments. While casinos are not yet legal in Vietnam, sportsbooks were recently legalized, although the industry has yet to pick up – more than likely due to internal legislative conflicts. For Vietnam to become a viable place for casino development the country has considered providing foreign development incentives via corporate tax reductions. They hope these lowered taxes will facilitate foreign dollars into their country’s development.
However, this country would need more time to determine its regulations and stance on online gaming and physical casino gambling which could take months to years – meaning Vietnam is not an immediate threat to Philippine’s gaming industry. Thailand, a third option, would possibly be the most lucrative choice for casino investors as the country already has a low corporate tax at 20%, high levels of mobile phone and internet usage, and its citizens are highly tech-literate. This country could be the leading licensing and regulator for land-based and online casinos if the Philippine’s permanently freezes license issuing. This could help online casino operators use Thailand to reach and capture a majority of the South Korean gaming market as well. However, all of this is contingent on when Thailand will allow and regulate casino gambling.
The fourth option is possibly the most threatening but not the most immediate concern. In 2016, Japan legalized casinos in hopes of offering an entertainment source, tourism booster, and attraction for high rollers. This country could easily compete with the Philippines by grabbing the premium market away from the Philippines with inclusive integrated casino resorts. In fact, a number of casino investors are eyeing Japan and applying for gaming licenses there such as Macau gaming tycoon Lawrence Ho.
However, Japan will only become a challenge for the Philippines down the road as the first resort is expected to be completed by 2024, 2025 at the latest. For online operators to capitalize on this market they would need to lobby for Japan to write legal definitions and regulations for online casino gambling. The Philippine government should assess these other potentials and determine if pausing their gambling licensing programs would be beneficial to their country’s growth in the long term.