In one of the important developments related to geopolitical environment which has economic and industry implication, Philippines has announced that it is going to cap the number of offshore gaming portals operating on its soil. Making the announcement, the country said that no new licenses would be issued to operators as there is growing concern about the illegitimate use of online gaming for money laundering which, in turn, has a negative impact on the socio-economic fabric of China. The ban on issuing of new licenses have been exclusively made on the request of China as the world’s second-largest economy is feeling the pressure related to social ills which have been fuelled by the booming online gaming industry. The announcement has come close on the heels of similar restrictions slapped by Cambodian authorities on the online gaming on 18th August.
Philippines and Online Gaming
In the Philippines, the online gaming operators are known by the name of POGOs, and according to the chairwoman of Philippine Amusement and Gaming Corporation, Andrea Domingo, authorities have now capped the POGOs to 61 in number. According to Domingo, no application will be processed furthers until and unless authorities take into cognizance concern of every stakeholder and find a way out to address that in a desirable and satisfactory manner.
Just so you know, the gambling continues to remain illegal in China, and the offshore gaming industry is luring the Chinese people in a significant manner. In fact, this sector is one of the major contributors to the GDP of the Philippines and from growth viewpoint; the online gaming industry is one of the fastest-growing sectors in the country. Its contribution to the social-economic fabric of the Philippines is also influential with more than 350,000 people getting employment in the sector. This number also includes around 1,00,000 migrants’ workers from China who are getting the support for their livelihood from the online gaming industry.
Changing Dynamics and influence of China
Interestingly, Domingo gave the hope to POGOs by saying that this ban is not permanent, and the agency is going to review the order towards the end of the year. The cost and benefit analysis related to the sector will be done, and accordingly, steps will be taken to ensure a Win-Win situation for all stakeholders involved in the process. According to the opinion of experts and analysts, it is not easy for the Philippines to stay put with the ban as POGOs act as an important source of revenue for the exchequer. According to an estimate, the agency is going to collect around $152 million as a license fee from POGOs this year, and by abandoning this sector, it would be difficult for the agency to make up the revenue foregone. However, there is an admission on the part of Domingo who said that the time has come to review and take stock of the situation and address the concerns of the stakeholders which haven’t met effectively in the past by the agency. The new stance adopted by the government is a complete reversal of its initial stand of encouraging the online casino industry. This about-turn, according to many outside observers, is the result of pressure that China has put on the Philippines.
An official statement released by the Chinese embassy in the Philippines expressed the concern of rising attacks on the migrant Chinese workers. According to the press release, many Chinese workers are tortured, humiliated, and even murdered while working in the online casino industry. The Philippines, on its own part, is also feeling the heat as the Defense Secretary of the country, expressed his concern over the large influx of Chinese workers into the country’s territory. The ban on online casinos in Cambodia is a kind of extreme step taken by the government. According to the chief executive officer of Leechiu Property Consultant who acts as a broker for POGO Office, the Cambodian government has missed an opportunity, and by putting a blanket ban, the government has forced even the legitimate online gaming operators to shift their base to the Philippines.