The Philippines' gaming sector continues to grapple with the aftermath of its ban on offshore gaming operators (POGOs), more than two years after the regulatory shift. At the recent SBC Summit, Keith McDonnell, Director of KMI Group, discussed the ongoing 'POGO hangover' as the Philippine Amusement and Gaming Corporation (PAGCOR) works to define a sustainable future for licensed domestic operators (PIGOs).
Regulatory Balancing Act
PAGCOR is currently focused on establishing a stable framework for licensed operators while also attempting to address lingering issues linked to former POGO activities. Despite official statements that POGOs have been eradicated following President Ferdinand Marcos' 2024 ban, PAGCOR estimates that half of the country's gaming spend still occurs outside the regulated market. This persistent grey market presents a significant challenge for the regulator.
Financial Pressures and Market Shifts
The regulated online gambling market in the Philippines has experienced a decline in financial performance, attributed to both external economic pressures—such as increased living costs due to Middle East tensions—and regulatory decisions. Measures like stricter advertising rules and the removal of gambling payment options from popular e-wallets such as GCash have made it harder for legal operators to compete with the black market. Following the Philippine Central Bank's move to separate iGaming from e-wallets, PAGCOR reported a 50% drop in transactions at licensed sites, alongside a rise in unregulated activity.
Implications for Industry Stakeholders
For operators and affiliates, the evolving regulatory environment means heightened scrutiny and the need for a conservative approach. With 31 legislative proposals under review—including some calling for increased restrictions or even a complete ban on online gambling—industry participants are advised to maintain strict compliance and avoid risky practices. Advertising remains tightly controlled, with bans on out-of-home placements, restrictions during TV prime time, and mandatory pre-approval for promotions. The focus may soon shift to monitoring social media and implementing affordability checks to ensure responsible gambling.
Why This Matters
The ongoing adjustments in the Philippines highlight the challenges regulators face in balancing market control with the need to keep legal operators competitive. For operators, the emphasis on compliance and responsible gambling is crucial to maintaining licences and long-term viability. Affiliates and suppliers must also adapt to stricter advertising and payment regulations, while regulators continue to refine their approach to combatting the grey market and promoting sustainable industry growth.
Key takeaways
- PAGCOR is working to address issues left by the now-banned POGO sector while shaping the future for domestic licensees.
- Half of the Philippines' gaming spend is estimated to occur outside the regulated market.
- Regulatory changes have led to a decline in legal online gambling transactions and an uptick in black market activity.
- Operators are urged to prioritize compliance and responsible gambling amid ongoing legislative scrutiny.