PIGO license originated from the epidemic
The PIGO (Philippine Inland Gaming Operator) license was launched during the COVID-19 pandemic. Facing the economic impact caused by the epidemic, the Philippine government hopes to make up for the loss in tax revenue by introducing a PIGO license to allow online gambling activities. As physical casinos are forced to close and the government needs new sources of revenue, PIGO has become a new fiscal tool to help fill the fiscal gap caused by the epidemic.
This is a milestone for the Philippines to officially open up the local online gaming industry, and it also sounds the clarion call for the rapid development of the local online gaming industry.
PIGO’s “one license, one casino” constrains industrial development
Initially, PIGO licenses required operators to be associated with physical casinos, with each license corresponding to one casino. This one-license-one-casino constraint limits the rapid expansion and development of the industry, preventing many potential operators from entering the market. Operators not only need to have the ability to operate online, but also need to rely on the resources of physical casinos, which limits the flexibility and innovation of the industry to a certain extent.
PIGO license reform, no longer linked to offline casinos, only stores can be operated
With the changes in market demand and the needs of industry development, the Philippine government has reformed the PIGO license policy. Currently, PIGO operators no longer need to be associated with physical casinos, they only need to be linked to stores to operate. This reform has greatly lowered the barriers to entry and increased the flexibility of the industry.
PIGO taxes are reduced every year, which is expected to be used to combat illegal underground online gambling industry
In order to further regulate the market, the government has implemented a tax reduction policy from 58% to 42.5%, and recently from 42.5% to 35%, and will be reduced to 30% on January 1, 2025; this move is intended to attract more underground illegal online gambling operators to switch to legal operations by reducing the tax burden on legal operations. By reducing the tax rate, the government hopes to reduce the attractiveness of illegal gambling activities and increase the competitiveness and market share of legal operators.
PIGO Outlook: Expanding or Shrinking?
There is some uncertainty about the future of the PIGO license. Although it is not difficult to apply on paper, and the application funds only require 50M pesos, the actual application is very difficult. The real situation is that not everyone can obtain a license. And there is recent news that some PIGO license holders faced severe scrutiny from PAGCOR and were merged and acquired under heavy pressure; it can be seen that PAGCOR will only continue to maintain strict supervision in this regard. Although the government is trying its best to reduce taxes to attract new practitioners on the surface, the "actual" application difficulty has not been reduced in the short term, and it may face a situation of shrinking and oligarchic resource concentration in the long term.
in conclusion
As a product of the epidemic, the PIGO license aims to make up for tax losses by introducing online gambling activities. Although it has undergone policy reforms and no longer needs to be associated with physical casinos, future development still faces serious regulatory challenges. The government cracks down on illegal gambling activities through year-by-year tax policy reductions, but strict application review and regulatory measures may lead to the concentration of license holders and the oligarchization of the market.
