On November 7, Philippine President Marcos issued Executive Order No. 74, banning the operation of POGOs (Philippine Offshore Gaming Operators).
The opening sentence demands the "immediate prohibition of Philippine offshore gambling, online gambling, and other offshore gambling operations."
The executive order clearly specifies the subjects, scope, and behaviors to which the ban applies.
At first glance, the document is filled with prohibitions, which might confuse those unaware of the context as if the sky had fallen.
However, it didn’t take long for a Philippine legislator to point out loopholes in the order.
Firstly, section 1(b) of the Executive Order states that offshore gambling operations "do not include online gambling games conducted in casinos operated by Philippine gaming companies, licensed casinos, or integrated resorts with intermediary agreements."
So, does this mean that POGO operations could be conducted within casinos like City of Dreams, such as Fontana, or even within casino-containing resorts (properties)?
Secondly, does the order apply to the so-called "gray areas" previously mentioned by the media—those institutions not regulated by the Philippine Amusement and Gaming Corporation (PAGCOR)?
According to this executive order, "other offshore gaming licenses" are defined as "licenses authorized and supervised and/or governed by Pagcor according to their respective charters."
However, the executive order also explicitly states that the Authority of the Freeport Area of Bataan (AFAB) is regulated by Pagcor, while offshore gaming licenses within the Aurora Pacific Economic Zone and Freeport Authority (APECO) have been transferred to Pagcor.
It is important to note that, according to the charter, CEZA is not regulated by Pagcor.
Then, is CEZA excluded from the ban?
Officials from PAGCOR and PAOCC have not provided a clear answer.
Nevertheless! On Saturday, Malacañang Palace issued a memorandum to CEZA CEO Katrina Ponce Enrile, instructing her to "comply with the President's directive on the ban" as stated in his State of the Nation Address on July 22, 2024.
"In accordance with Republic Act No. 7922 (also known as the '1995 Cagayan Economic Zone Act'), you are hereby instructed to comply with the President's directive issued during the State of the Nation Address on July 22, 2024, concerning the immediate prohibition of Philippine offshore gaming operators or Philippine internet gaming license holders, and to adhere to applicable laws, regulations, and provisions."
If this memorandum aligns with CEZA's charter, then section 6(c) stipulates that the law authorizes CEZA "to approve, accept, recognize, and permit any local or foreign enterprise, business, or investment into the zone, subject only to the restrictions imposed by CEZA under this Act and constitutional provisions."
Thus, if CEZA has "the responsibility and authority to grant such permanent residency to special investors," and these special investors and their families "shall have the right to freely enter and exit the zone without any special authorization from the Bureau of Immigration," how does this Executive Order No. 7 cover CEZA?
At the end of July, a week after the President issued the POGO ban, the current director of CEZA, Enrile, and her father, while attending a hearing on crimes related to Pogos, stated that the ban on POGOs should not disrupt CEZA's business and interests, including its offshore gaming license holders.
According to a report from June this year, out of the 96 enterprises registered with CEZA, only 12 are interactive gaming support service and business process outsourcing operators.
This is even lower than the 35 out of 92 enterprises engaged in online gaming in 2017, as reported by the Audit Committee.
(PS: According to CEZA's charter, CEZA has the authority to conduct offshore iGaming business. This charter was drafted by her father when he was a legislator.)
Currently, CEZA has not shown any stance regarding Executive Order No. 74. You issue the order, but I remain non-committal.
It's unclear whether President Marcos' determination will persuade CEZA to eliminate all iGaming businesses, or if it's just for show, sending a memorandum that doesn't look so bad from the outside.
However, the concerns of the related legislators are not unfounded. Offshore gaming brings with it money laundering, fraud, illegal financial activities, and not least, the social impact of rising crime rates.
And as a privileged economic zone, CEZA also becomes a "special passage" for certain individuals.
For example, according to records submitted by relevant departments, She Zhi Jiang, who previously claimed to be a Chinese spy and a colleague of Guo Huaping, entered Thailand using a CEZA visa.
As for whether CEZA is covered under Executive Order No. 74, even the Philippine Attorney General has not provided a clear answer, merely stating: "All POGOs, whether or not within the jurisdiction of the Philippine gaming companies, should cease operations by December 31, 2024." It's as if nothing was said.
No wonder one of the most active Philippine legislators, Hong Tivieros, stated, "A clear law is needed to advance a meaningful, clear, unambiguous, and comprehensive ban."
