Pagcor must end its love affair with POGOs

SEVERAL senators have slammed the “roadmap” presented by the Philippine Amusement and Gaming Corp. (Pagcor) that will allow Philippine offshore gaming operators, or POGOs, to continue doing business in the country.

Pagcor officials defended their proposal during the Senate hearings that are seeking to determine how a ban on POGOs would impact the economy.

They presented a four-page plan that will deliver P10 billion in revenues from offshore gaming by 2027.

The senators were unimpressed, convinced as they are that the social cost of letting POGOs stay far outweighs the earnings to be gained.

The debate over the fate of offshore gaming companies has been heating up since the Department of Justice (DoJ) ordered the shutdown of 175 gaming operators earlier this year for involvement in criminal activities.

Among the transgressions is the “pastillas” scheme that involved bribing airport immigration personnel to sneak in Chinese nationals hired by POGOs.

The operators were also linked to money laundering, prostitution, and the kidnapping and murder of Chinese.

There’s more: the Bureau of Internal Revenue has been going after POGOs that refuse to pay P50 billion in franchise taxes.

The DoJ also banished 40,000 illegal Chinese workers employed by POGOs.

That would have sent a clear signal to Pagcor to end its long association with the gaming operators. Yet, the state regulator refuses to give up on POGOs, arguing that “a more robust regulatory framework … will eliminate illegal online gambling operations and the social ills associated with it.”

Sen. Sherwin Gatchalian, whose Committee on Ways and Means is spearheading the POGO hearings, derided the Pagcor road map as just “an alley.”

Sen. Francis Escudero advised Pagcor to seek other sources of income once POGOs are banned. He said driving out offshore gaming operators might even boost local casinos and other forms of gambling.

Pagcor also seems to ignore the fact that China has totally banned gambling, and has been blacklisting countries that allow Chinese online gamblers. POGOs rely mainly on Chinese clients; almost 50 percent of POGO transactions are made using the Chinese renminbi.

Pagcor, however, sees a silver lining in the fact that the Philippines is the only online gaming operator in the Southeast Asian region. But Gatchalian pointed out that the downside is the “reputational risk” from the country being unable to curb POGOrelated crimes which could trigger a hemorrhage in foreign direct investments. That, to the senator, is unacceptable.

Concerns have also been raised about the gaping hole in the property market once POGO workers abandon the condo units they have been renting. This belies the lack of confidence in the property sector’s resilience. Condominium properties are, in fact, slowly bouncing back as the economy continues to recover.

When POGOs first opened in 2016, they were welcomed as a potential cash cow. Under the Duterte administration, the gaming operators thrived and were hiring more than 300,000 Chinese at their peak.

In 2020, POGOs turned in P7.2 billion in revenues, proving their worth as a substantial contributor to economic growth.

The Covid pandemic burst the POGOs’ bubble, and many operators packed up and transferred their business elsewhere. Revenue fell to P3.9 billion last year.

Sen. Mary Grace Poe has said she would not mourn the POGOs’demise. “As much as we need the income, I don’t think we are desperate enough to say that ‘Never mind the cost. Let’s just go with this’,” the senator said.

The debate will continue until the government comes up with a clear policy on online gaming operators. But the arguments will focus on whether POGOs are an economic boon or a social menace.

The inescapable truth is that gambling is a vice, and it is immoral for a government to raise money by exploiting a vice. It is better off promoting values like thrift and hard work.

Online gambling is especially problematic because it is difficult to control. Unless Pagcor can guarantee that it has the will and the means to regulate internet gambling, it will continue to be a difficult tiger to tame.

The bottom line, without compromise, should be: No to POGOs.