President Ferdinand Marcos’ silence on the future of iGaming during his State of the Nation Address (SONA) yesterday ‘speaks volumes’ and opens the door for a brighter future for regulatory development in the Philippines.
Ever since calls emerged from within the Philippines to ban online gaming, it has been anticipated that Marcos would mention the issue in his address, which is delivered annually and sets out the Government’s plans for the year ahead.
His choice to swerve the issue, according to Keith McDonnell, Director at the KMI Group, was a “well thought-out strategy, rather than an oversight”, allowing time for careful consideration of the impacts of such drastic changes.
Previously, Marcos has used the SONA to deliver breaking news for the gaming industry, announcing last year his intentions to oversee the closure of POGOs by the end of 2024.
McDonnell told iGaming Expert: “What the Philippines needs most now is time to carefully consider how a regulatory framework and workable tax system can provide long-term benefits to the local economy while protecting the most vulnerable.
“Everyone knows an outright ban on [inland gaming operators] would drive things underground, leading to more social, economic and political problems.”
Golden opportunity
McDonnell pointed to the opportunity the Philippines has to establish itself as “the place for regulated business” in South East Asia, given the region’s lack of established gaming markets.
Macau remains the leading destination for gaming in South East Asia, but the majority of countries in the region play host to grey or wholly unlicensed markets.
“Knee-jerking amidst the first calls for banning would blow that opportunity and damage the economy,” said McDonnell.
Alongside establishing its own market, in a previous interview McDonnell also spoke about the economic potential of the Philippines to act as a gateway for international operators into other countries in the region.
“It’s the first legitimate foothold in the continent for evolving into the wider Asia market,” he explained. It may be that companies base themselves in and have operations in the Philippines, where there is a really deep and broad skill spectrum because the Philippines has been involved in gambling for a long time. But then they use that as their base for Thailand and other countries that roll out.”
Although lawmakers are currently targeting the industry, McDonnell emphasised that energy on the ground in the country has taken on a new lease of life when it comes to iGaming potential.
If successful efforts are made by the country’s regulator alongside the government to clean up the ecosystem, it will serve well in terms of increasing how enticing the market is for Western operators.
‘Restraint is leadership’
Tonet Quiogue, Founder of Arden Consult, argued that the President’s decision to remain silent despite political pressure signals a refusal to be rushed into a decision that requires “more data, deeper study and a holistic understanding”.
In an opinion piece posted on LinkedIn, she said: “What we are dealing with is a legitimate, licensed domestic industry regulated by PAGCOR—one that contributes billions to the national treasury, funds universal healthcare, and employs thousands.
“If a sitting President can suddenly announce that a lawful, revenue-generating industry can simply be banned, the implications on investor confidence, economic stability, and the rule of law would be profound.”
The onus, she continued, is now on Congress and PAGCOR, the country’s regulator, to lead the next stages of conversation towards deciding the future of the Philippines’ iGaming market.
Failures of prohibition
Quiogue, like many of those against calls for a total ban, pointed to the dangers of such a drastic decision.
She cited the examples of China, Vietnam and Indonesia. All of which have implemented strict anti-gambling rules but are dealing with thriving illegal betting markets.
In the case of China, it faces one of the largest illegal gambling problems, as tens of billions of yuan are wagered annually through underground online casinos and overseas operators targeting Chinese punters.
“The lesson is clear: regulated markets can channel human behaviour far better than black markets can. Countries that have embraced regulation are not ‘pro-gambling’ so much as pro-transparency and pro-consumer-protection,” she explained.
“They recognise that gambling, like it or not, is a reality – one best managed through rule of law rather than wished away with prohibitions. By contrast, countries that ban gambling often end up fighting a larger monster, as illicit operations fill the void with no rules at all.”
Stricter regulation
Organisations within the Philippines have already begun to tighten rules surrounding gambling, signalling a desire for stringent regulations related to the industry.
On 16 July, PAGCOR and the Ad Standards Council signed a memorandum of understanding to pre-screen all gambling advertisements. Meanwhile, the Cybercrime Investigation and Coordinating Centre (CICC) warned influencers and content creators to stop promoting illegal gambling sites.
At the same time, the Central Bank also sent out a draft circular which aims to limit the amount of money players can deposit on gambling websites, as well as a 24-hour cool-off period following heavy usage.
Although many operators in the Philippines believe they have already implemented many of the measures currently being debated by legislators, they are also willing to listen and adapt their practices to comply with new regulations.
Digiplus, the country’s largest operator, told the Government: “We are open to evolving and improving wherever needed. If there are new standards to meet, or better ways to protect players, we will act swiftly and responsibly. But please, do not condemn an industry, and the 50,000 Filipino families who rely on it, without hearing the facts first.”
As of yet, no official schedule has been announced for floor deliberation regarding the legislation targeting an outright ban.
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