Odd Decree: New POGO Ban Won’t Be Written in Law

Ferdinand Marcos Jr, president of the Philippines, has published a decree banning offshore gaming operations but rejected a call to enshrine the ban in law.  

In a fiery State of the Nation address on July 22nd, Marcos banned Philippine Offshore Gaming Operations, or POGOs, calling them havens of corruption and crime. Then, on 5 November 2024, he officially signed Executive Order 74, instructing all POGOs to “be gone” by 31 December. 

The ban reportedly covers POGOs licensed by the Philippine Amusement and Gaming Corporation (PAGCOR), as well as any strategic support provider, IT support provider, live studio and streaming provider, or gaming software provider.  

The order said POGOs were allegedly fronts for online scams and caused reputational damage that could deter foreign investment and tourism. Another allegation levelled was that these operations opened the door to financial crimes.  

For two years, the country has been trying to extricate itself from a grey list of countries at risk of money laundering and terrorism financing. 

Is Detering Crime Enough?

President Marcos has deemed the Executive Order (EO) sufficient to deter crime without the need to enshrine the ban in law.  

In a news release, the President said that the Executive Order would help safeguard national security, maintain public order, uphold the rule of law, protect the safety of citizens, and ensure the social fabric of the nation.  

However, the committee chairperson overseeing POGO hearings is concerned the EO is not a failsafe, adding that it contains loopholes that may allow POGOs to return in a different guise.  

She lauded the aims of the EO, but said the order excluded games of chance conducted in PAGCOR-operated casinos, licensed casinos or integrated resorts with junket agreements. She was also concerned that special economic zones have the leeway to introduce offshore gambling.  

The President disagreed, saying it was the nature of the operation that they were banning, not whether it was under the oversight of PAGCOR or not.  

A Brief Outline of the History of POGOs

POGOs began operating in the Philippines in 2003 and have been regulated by the government since 2016, at the start of Rodrigo Duterte’s presidency. 

• In 2016, PAGCOR started processing licence applications for POGOs to boost revenue after it decided not to renew the licence of local online gambling firm PhilWeb Corporation.
• According to PAGCOR, during its peak in 2019, there were almost 300 licensees.
• Since August 2019, PAGCOR has banned licenses for new firms. 
• The Senate approved a bill in June 2021 levying greater taxes on POGOs.
• By the end of 2023, stricter regulations had reduced the number of operating POGOs to about 75, which reportedly further decreased to 54 by the third quarter of 2024.   

POGOs, renamed Internet Gaming Licensees (IGLs) in October 2023, are firms operating in the Philippines that offer online gambling services such as online casinos and sports betting to markets outside the country, with a sizable number catering to the Chinese market.  

To operate legally, they must first be licensed. Thereafter, they are obliged to restrict the use of their services by any individual in the Philippines, regardless of citizenship, Filipino citizens regardless of location, and potential patrons in countries and territories where offshore gambling is illegal. Failure to do so risks licence revocation. 

Problems Posed by POGOs

POGOs have been linked with some serious criminal activities and have posed numerous problems in the country, including the following: 

1. Crime and Corruption: POGOs have been linked to various criminal activities such as scamming, human trafficking, kidnapping and even murder. These illegal activities have raised significant concerns in government circles about public safety and even national security.  
2. National Security Threats: There have been reports of Chinese spies entering the country posing as POGO employees, which has led to concerns about espionage and national security threats. 
3. Regulatory Challenges: Despite efforts to regulate and ban POGOs, some operators have found ways to circumvent the bans by registering as Business Process Outsourcing (BPO) firms, making it difficult for authorities to enforce regulations.  
4. Economic Impact: While POGOs contribute to the economy through taxes and employment, the negative impacts, such as crime and corruption, can outweigh these benefits. 
5. Social Issues: The presence of POGOs has led to social issues such as gambling addiction and the exploitation of workers, including poor working conditions and unpaid wages. 

The Philippine government has been taking steps to address these issues, including raids, crackdowns and legislative reforms. However, the challenges posed by POGOs remain daunting.