For several years, the Philippines have been probably the fastest growing gambling market in the world. The national casino industry has made the best of the fact that gambling is banned in nearby mainland China, while Macau casino operators have been struggling over the past two years due t the strict Covid and travel restriction implemented by the government. With gambling laws much more liberal in Philippines, the gambling market in the country has been on a steady rise since 2016. However, this sudden boom also brought along some negative sides to the notoriously shady casino industry. Now, the Philippine government seems determined to crack down on these opaque businesses.
Crackdown on Offshore Gambling Companies
An official from the Philippine justice ministry said on Monday that the country will cease the operations of 175 offshore gambling companies. In addition, around 40,000 workers from China will be reported back to their country. Philippine offshore gambling operators (POGOs), at one point, employed over 300,000 Chinese employees. Nevertheless, the pandemic and unfavorable tax regime forced many of them to move their operations elsewhere.
Jose Dominic Clavano, the spokesperson for the Philippine justice ministry, explained that the main reasons for the crackdown on the casinos were numerous reports of criminal activities among Chinese nationals. These included murders, kidnappings, and other serious crimes committed by the Chinese nationals against their compatriots.
Among the POGOs facing closure, many of them had their licenses already expired or revoked. According to Clavano, the most common reason for license cancellation was failing to pay government fees, but there were other violations, as well. The government official added that the separation of Chinese workers is set to begin sometime next month.
A Huge Hit to the National Economy
The finance ministry reported that POGO fees brought the government 3.9 billion pesos last year and 7.2 billion pesos ($122.21 million) in 2020. According to the experts’ estimation, the operators spent an even greater amount on workers’ spending, taxes, and office rentals.
As for the Chinese side of the story, their embassy in Manilla released a statement saying that Beijing is fully supportive of the Philippine government’s actions, including the crackdown on POGO criminal activities and deportations. They added that the government is forced to undertake tough measures to curb gambling. The Philippines regulator did not offer a comment but has recently said that there are currently only 30 POGO companies operating with a valid license, compared to 60 pre-pandemic.
Among other things, the exit of POGO firms from the Philippines will have a huge impact on the national real estate market. Leechiu Property Consultants, the real estate consultancy firm, has published an estimation saying that the POGO crackdown will leave 1.05 million square meters (259 acres) vacant. To get a picture of how big this is, it’s a third of the size of Central Park. Furthermore, the Philippines will lose 8.9 billion pesos ($151 million) in annual rental fees.
The national gambling industry currently employs 111,000 Filipinos and 201,000 Chinese workers. This means that POGOs generate 190 billion pesos ($3.22 billion) for the country’s economy, primarily in the property and real estate sectors.
