Offshore gaming operators flourish in the Philippines

by Noah Taylor Last Updated
California punter illegally wagered online from thousands of miles away

Philippine Offshore Gaming Operators are being accused of catering to illicit Chinese gamblers.

9News reports that dozens of scantily dressed Filipina croupiers stand in booth shuffling cards in front of a webcam, their faces softly illuminated by professional lighting.

Nearby, rows of Chinese nationals sit at desks chatting on mobile phones with potential clients back in China.

This is what a typical POGO looks like, according to descriptions provided to CNN by several gaming experts.

Some are based in abandoned malls, while others are found in converted parking lots or cheap rented offices, they say.

In the past three years, the Philippines has emerged as a major hub for online gambling, according to Filipino officials.

The country has attracted more than 100,000 Chinese nationals who work in virtual casinos catering to players back in China where gambling is illegal.

They have been both a boon and a curse for the country.

The online casinos generate tax revenue and desperately needed jobs in Manila’s crowded downtown area.

At the same time, they’ve’ pushed up rents and created new challenges for the Philippine National Police.

In the past year, Beijing has ratcheted up pressure on Manila to shut down the industry, following its success in convincing Cambodia to move toward doing the same thing last year.

Manila stopped taking applications for new POGO licences in August 2019, citing concerns about national security, but President Rodrigo Duterte said the next month that we would not ban the industry.

“We decide to benefit the interest of my country,” he said.

“I decided that we need it.”

In May, President Duterte allowed the POGOs to reopen, after two months of closure due to the COVID-19 pandemic, effectively endorsing them as essential businesses.

Online gaming platforms give players the chance to gamble remotely.

They sign up, choose a game and it is played over a livestream in another jurisdiction.

“The games offered on these platforms are dictated by Asian tastes, where most of the demand comes from,” Global Market Advisors’ Brendan Bussman said.

Global Market Advisors is a Las Vegas-based consulting firm specialising in the gaming, sports, entertainment and hospitality industries.

“There is a lot of baccarat, as well as some sic bo and blackjack,” Mr Bussman said.

The amounts wagered tend to be low, in the range of $5 to $100, he said.

Manila overtakes traditional locations as gambling hotspot

Manila has become the number one hotspot worldwide for online gaming, in front of Malta, the Isle of Man and Curacao, according to a lawyer at Taiwanese firm Lin & Partners, David Lee, who specialises in gaming laws.

“The Philippines pioneered online casinos in the early 2000s when Cagayan, a province to the north of the country, started awarding licences to a handful of operators,” explains Ben Lee, the founder of IGamiX, a Macau-based consultancy firm focused on the gaming industry in Asia.

“But they really took off in 2016, when President Rodrigo Duterte came into office.”

Duterte handed the right to issue offshore gambling licences to the Philippine Amusement and Gaming Corporation, a government entity that operates casinos and regulates the industry.

“It began to aggressively develop the industry by awarding dozens of licenses,” lawyer David Lee said.

Chinese businessmen were quick to seize the opportunity and the number of POGOs mushroomed.

There are now 60 licensed offshore gaming operators in the Philippines, according to PAGCOR.

They are assisted by several hundred service provides, who help them build and maintain the infrastructure behind their platforms, according to IGamiX consultancy’s Ben Lee.

“Some 90 to 90 per cent of POGO customers are located in China,” he said.

“This is illegal. Chinese laws ban any form of gambling by its citizens, including online and overseas.

Laws in the Philippines also ban real money online casinos from marketing their services to citizens of a country where gambling is illegal.

But the rule is ignored by most POGO operators and poorly enforced.

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