Gaming firms shutting down, Pagcor warns
THE Philippine Amusement and Gaming Corp. ( Pagcor) warned that more gaming firms could shut down because of stringent tax rules that worsened the effects of the ban on casino operations during the community quarantine.
The state-run gaming firm issued the warning following the exit of two firms, including a unit of Macau’s gambling giant Suncity Group.
“Yes, Suncity has left,” Pagcor Chairman and Chief Executive Officer Andrea Domingo said when asked to confirm rumors that Asia’s leading casino junket operator had closed shop.
Jose Tria, Pagcor assistant vice president for offshore gaming licensing, said aside from Suncity,
Don Tencess Asian Solutions had also sought to cancel its license.
“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,” he added.
Pagcor suspended the operations of Philippine offshore gaming operators (POGOs) on March 18 after the government declared a public health emergency because of the coronavirus pandemic.
On May 1, the government announced the partial reopening of POGOs, but said the firms and their service providers must first settle all their tax liabilities with the Bureau of Internal Revenue.
Domingo said the closure of POGO firms would not only affect government coffers, but also 30,521 Filipino workers.
Besides POGO license holders, Tria said 13 service providers — which involves call center operations, telemarketing, systems and hardware support, as well as “live dealer” video streaming and other online games — had also closed shop.
He bared that these companies opted to cease their operations because of the franchise tax payment being demanded by the government and high overhead costs while their operations remained in limbo.
POGO licensees questioned the imposition of the franchise tax, pointing out that the Tax Code did not state that entities with no physical presence in the country were subject to the levy.
“There are other jurisdictions that have opened up offering better tax rates and friendlier environment,” Tria added. “Some [POGOs] also can no longer take the criticisms they get each day that make them feel unwelcome in our country.”
He gave assurances that Pagcor was doing its best to help POGO licensees and their service providers to weather the storm brought on by the coronavirus pandemic.
“We’re working on ways to allow the resumption of their operations, but we can only do so much,” the PAGCOR official said. “We are regulators, we have to do everything in accordance with the law.”