BUSINESS

Duterte new threat to ‘suppress’ Philippine online gambling

TAGs: Boracay, Philippines, Rodrigo Duterte

philippines-online-gambling-duterte-threatThe Philippines’ online gambling industry could face a new crackdown after President Rodrigo Duterte called for the industry to be “suppressed.”

Local media outlet Rappler quoted Duterte giving a speech on Wednesday in which he said “online bingo, it will be suppressed, no gambling.” Duterte went on to say that gambling was responsible for numerous local cases of extortion and kidnapping and he didn’t care if any of the gambling companies had government-issued contracts to conduct their activity.

On Thursday, Duterte’s Chief Presidential Legal Counsel Salvador Panelo told Rappler that “as far as I know, [Duterte’s comment] refers only to illegal online gambling.” That contradicts Duterte’s exact words, which, translated from Tagalog to English, read: “To hell with the contract [held by locally licensed operators], I told you I do not want gambling, period.”

It bears mentioning that this is hardly the first time that Duterte has issued such threats. In July 2016, within hours of being sworn into office, Duterte issued an ultimatum that “online gambling must stop.” That December, he ordered “the closure of all online gambling … All of them. They have no use.”

But in 2017 Duterte issued an executive order (EO) that eliminated the Philippines’ multi-jurisdictional online licensing scheme in favor of the new Philippine Amusement and Gaming Corp (PAGCOR) Philippine Offshore Gaming Operator (POGO) license category.

Duterte’s reference to ‘online bingo’ also recalls his aggressive campaign against local eGames and eBingo operator PhilWeb, which offers ‘online’ gambling to local residents via digital terminals in retail shops across the country, while the POGO industry is strictly focused on international gambling markets.

Moreover, Duterte’s Wednesday comments regarding extortion and kidnapping appear to refer to incidents stemming primarily from land-based gambling. Such incidents have plagued Manila’s casino operators since their launch a few years ago.

Duterte even referenced the Okada Manila casino by name, saying “look at Okada, all the kidnappers, extortionists, scalawag policemen, they kidnap right there in the hotel room. They call the family. “You don’t want to pay?” Then they will kill them.”

That said, in September, PAGCOR chair Andrea Domingo warned illegal online operators to acquire a local license “or face dire consequences.” All told, we’re really no wiser regarding Duterte’s intentions than when we started the day.

BORACAY SITUATION NEEDS DUTERTE ORDER
On a related note, the Philippines Department of Justice has issued a legal opinion suggesting Duterte needs to issue another EO to ensure the licensed casinos on Boracay island don’t reopen to the public now that the island’s six-month environmental cleanup is complete.

On Monday, local media reported that a Duterte-created task force had urged PAGCOR to cancel all casino licenses issued to Boracay operators. On Tuesday, PAGCOR indicated that it would comply with this request, but the DOJ now says that enforcing this request could require a more definitive statement from Duterte.

The Manila Bulletin quoted the opinion dated October 8 written by DOJ Secretary Menardo Guevarra, which said the state “possesses police power to prohibit gambling in the Philippines or any part of it” but suggested an EO “is proper to direct PAGCOR to hold the grant of licenses to casinos in Boracay and to revoke existing licenses.”

In wording that echoes Duterte’s ‘contract’ comments, the DOJ opinion notes that a contract is “premised on mutual agreement of parties” while a PAGCOR gaming license is “an act of grace, a grant of privilege” that “can be granted, revoked or withheld renewal” at the regulator’s discretion.

Furthermore, the opinion said the regulation of gambling “is a valid exercise of police powers” and licensed companies cannot claim that an EO “directing the revocation of existing licenses violates the non-impairment clause under the Constitution.”

However, the opinion notes that gaming licensees “may have already expanded capital on their investments” and thus any EO should contain “provisions concerning the consequence of cancellation of provisional licenses.”

Earlier this year, Macau casino operator Galaxy Entertainment Group (GEG) was issued a provisional license to develop a $500m resort casino on Boracay, and the company suggested as recently as August that it intended to push through with the project.

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