Philippine online gambling ops caught in political crossfire

philippines-online-gambling-political-crossfire

philippines-online-gambling-political-crossfirePhilippines-licensed online gambling operators continue to find themselves caught up in political squabbling over their right to operate.

Last week, the Philippine Amusement and Gaming Corporation (PAGCOR) announced that Philippine Offshore Gaming Operators (POGOs) would be allowed to resume partial operations provided they follow Enhanced Community Quarantine guidelines, including limiting operations to 30% of manpower.

In confirming the restart, Presidential spokesperson Harry Roque said that since all POGO customers are based abroad, POGOs were akin to the nation’s significant business process outsourcing (BPO) sector, which includes call centers for major international businesses.

This view was later rejected by Rey Untal, president of the Information Technology and Business Process Association of the Philippines (IBPAP), who told local media that, while POGOs and BPOs “share one extraneous similarity,” POGOs “cannot be considered” part of the BPO sector.

Untal claimed that POGOs’ international focus was only “because they are allegedly unable to practise their betting or gambling functions in their respective shores.” Untal also noted that members of his outfit employ 1.3m direct workers whereas Chinese nationals account for well over half the estimated 121k POGO workers.

The belief that POGOs are simply BPOs of a different stripe was also challenged by Senate Minority Leader Franklin Drilon, who warned that POGOs could now claim they are exempt from paying gaming license fees to PAGCOR and the 5% franchise tax imposed by the government.

Drilon noted that the Bureau of Internal Revenue was already having enough difficulty collecting taxes from some POGOs and the government’s BPO argument “could further undermine the efforts exerted by the agency in collecting unpaid taxes from POGOs.”

Public antipathy towards POGOs has ranged from legitimate concerns over dramatic hikes in Manila condo rental rates due to the need to house POGO staff, to more outlandish theories regarding China using POGO operations to conduct espionage on foreign soil.

The occasionally OTT tone of some POGO comments led PAGCOR to issue a ‘POGO Primer’ that attempts to separate POGO fact from fiction. Topics include ‘POGO is NOT prostitution,’ ‘POGO is NOT a spy network,’ and Can POGO be used for money laundering?’ Will it do any good? Hard to say at this point.

Meanwhile, the Philippine Economic Zone Authority (PEZA) has voiced support for the government’s desire to raise revenue through POGOs, as well as PAGCOR’s proposal to relocate POGOs outside Metro Manila to dedicated ‘hubs.’ However, PEZA warned that while it has the authority to register land and buildings as economic zones, it “does not register IT/BPOs engaged in online gambling.”

PEZA said the government should look to base POGO hubs in the Cagayan Valley Ecozone and the Aurora Economic Zone, both of which have the authority to register gambling operations. Alternatively, the government can “put these operations in selected islands … but not in the existing business districts and urban centers of Metro Manila and other cities.”