There is just over a month left until the final deadline for the ban on Little Pony POGO!
In recent years, the Philippine online gambling industry (POGO) has been an important part of the Philippine economy, not only attracting a large amount of foreign investment but also bringing many job opportunities, and boosting the Philippine tourism, service, and real estate industries.
However, with the Philippine president signing Executive Order No. 74, announcing a comprehensive ban on offshore gambling operations, the gambling industry can now be said to have entered a cold winter.
In the past, the streets of Manila were still bustling at dawn, but now they are empty before midnight!
In the residentially concentrated shore area, many people have started packing and reselling household items.
And in various office buildings, Pearl Tower is no longer operating, Kamiti has disbanded, and RCBC has moved!
To describe the current situation of the Philippine online gambling industry in one word, it is a "turning point".
The gambling industry today can be said to coexist with economic contributions and social problems. Although it has brought billions of pesos in tax revenue to the Philippines, the illegal activities, money laundering, and public security issues that have emerged in recent years have caused a lot of dissatisfaction among the Filipino people and the government. Minor issues aside, there have also been many severe cases!
The new policy order requires all offshore gambling operators to terminate their operations by the end of 2024, conducting a comprehensive cleanup, showing the Philippine government's determination to regulate the industry chaos.
The issuance of this ban by Little Pony, in a sense, represents the "will of the people", but a detailed analysis reveals that this wave of bans will not take away all criminal activities, the current situation is not great, and there may be many problems in the future.
1. Over the years, as the gambling industry has grown, the quality of various companies has been mixed. Not to mention the big ones, there are quite a few issues with illegal operations and tax problems, which has also led to somewhat overwhelmed regulation in the Philippines in recent years.
2. Due to the relatively lax enforcement environment, many foreign criminals have been moving to the Philippines, so many countries have been continuously pressuring the Philippines. There have also been some large-scale criminal operations, which have attracted the attention of some international organizations, such as the International Anti-Money Laundering Organization, which is not a good thing.
3. The withdrawal of this industry may lead to tens of thousands of job losses, and the real estate and service industries will also be affected.
In September, the Department of Labor already reported that 48 online gambling companies had ceased operations, expected to result in over 19,000 employees losing their jobs.
But with more companies dissolving and moving, and various large office parks/buildings ceasing operations, the expected number of unemployed in the Philippines will definitely be much more, at least double!
According to data from the Department of Labor, the number of Filipino and foreign POGO workers facing the risk of unemployment is 79,735!
In Makati and BGC, after the implementation of the ban, a large amount of office space has become vacant, and in areas like Pasay and Parañaque, rental prices have fallen by about 10%-20% after the ban. Looking at the smaller picture, many are selling some miscellaneous household items in the second-hand groups, clearly preparing to leave after cleaning up.
The government is finding it difficult to adjust the economic pressure due to reduced tax revenue, rising unemployment, real estate recession, and the decline of the catering industry in the short term.
4. The rapid development of the online gambling industry has partly benefited from high-tech support. There are quite a few internet technology experts in this industry, and for them, deep forgery and anonymous payments are not difficult, which makes illegal activities harder to track and also increases the difficulty of law enforcement.
As for the future, it's hard to say what the Philippine gambling industry could develop into.
1. Complete exit from the online gambling industry?
Completely banning all activities related to online gambling, including online gambling at integrated resorts, and transitioning the Philippines from a "gambling hub" to other economic models? This possibility exists, but seems unlikely. After all, just the companies and businesses that pay taxes legally contribute over 10 billion pesos to the GDP annually! Who would want to give up such a big piece of the pie?
Besides gambling, the Philippines still has tourism, manufacturing, or agriculture to offer, but the economic contributions of the latter two definitely can't top anything.
Given the current economic situation in the Philippines, developing the tourism industry should be a way forward, but whether the supporting facilities and services can keep up is a question.
2. Reshaping industry rules?
This possibility is higher than the previous one and more practical!
If the government changes its policy, the future may allow a limited number of legal gambling operations to exist through stricter regulation and tax policies, such as:
- Only allowing online gambling activities aimed at the domestic market.
- Strictly reviewing licenses, establishing transparent and traceable financial flow mechanisms.
Plainly speaking, it's about re-entering the market according to new rules, as long as all stakeholders think it's OK, gambling can still continue to exist in the Philippines!
Recently, many POGO companies have also continued to operate by changing their registration documents to BPO and moving to Visayas and Mindanao. To avoid law enforcement, they have also broken down into small teams of 10-20 people.
The Philippine government says it will strictly regulate BPO applications, and those that have changed their registration to BPO will also be subject to strict supervision, but it has not definitively said that they will definitely be banned. Maybe there is something to be done in this area.
3. Regional migration
Some banned gambling operators may move to neighboring countries with more lenient regulations, such as Cambodia, Vietnam, or other Southeast Asian countries, forming a new industry distribution pattern. Or as we mentioned in our previous article, company assets are moved abroad, employing Filipino workers to work remotely.
But since the assets are moved, whether or not to use Filipino workers doesn't really matter. If they don't use Filipino workers, then the value created by these companies and employees is obviously not related to the Philippines anymore.
Moreover, Thailand has been very active in advancing gambling issues recently, having already determined the number of licenses, registration, extensions, etc., just waiting for the final legislation to pass and be implemented!
The rise and fall of the Philippine online gambling industry reflect the contradictions between economic development and social governance. Under the backdrop of Executive Order No. 74 promoting industry rectification, the Philippine gambling industry, although difficult, is not completely eradicated.
This event does not mean the end, but rather an opportunity to redefine the industry model!
