A couple of years of media scandals, government pressure and pandemic uncertainty have finally taken their toll on the Philippine Offshore Gambling Operators (POGOs). The Philippine Amusement and Gaming Corporation (PAGCOR) have confirmed that atleast two operators have left the country over tax “issues” with the government, local outlet GMA News reports.
PAGCOR chair and chief executive officer Andrea Domingo confirmed that Suncity, Macau’s gambling giant, had decided to leave the country, while assistant vice president for offshore gaming licensing Jose Tria separately confirmed Don Tencess Asian Solutions had sought to cancel their license.
And that doesn’t appear to be the end of it. “There are others more that are leaving the Philippines”, noted Domingo. She made sure to note that this will affect government revenues, as well as Filipinos employed by POGOs.
“I’ve heard there are other companies that also plan to cancel their licenses, but I haven’t received their official letters so I can’t name them yet,” said Tria. “There are other jurisdictions that have opened up offering better tax rates and friendlier environment. Some [POGOs] also can no longer take the criticisms they get each day that make them feel unwelcome in our country.”
And boy do POGOs take criticism. When PAGCOR announced 11 POGOs had been cleared to resume operators, senators doubted that they had paid their taxes publicly. When locally unlicensed operations, nicknamed NOGOs by PAGCOR, start causing problems, the licensed POGOs are questioned and threatened with a shutdown of the industry.
On top of the two exiting POGOs, Tria confirmed that 13 POGO service providers had also ceased operations. The problem for everyone boils down to taxes, he said, and as a gambling regulator, they can’t really step in and solve tax disputes. “We’re working on ways to allow the resumption of their operations, but you know, we can only do so much… We are regulators, we have to do everything in accordance with the law,” said Tria.
“We’re not tax experts. It is for POGOs to question the applicability of the franchise tax. Whatever the court decides, we follow. If they don’t want to question the tax, then they should pay it,” he added.
Assuming POGOs continue to be the whipping boy and favorite distraction for politicians and media pundits, it will be a loss for the Philippines one way or another. PAGCOR notes that more than 31,000 Filipinos are employed by the online gambling industry, take up as much as 13% of all office demand and pay in as much as P6 billion ($120 million) to the government, with an estimated P21.6 billion outstanding. That can all go away if this pressure continues.