The Lao government has taken the first step towards issuing licenses to online gambling operators by establishing the Lao Offshore Gaming Authority (LOGA).
The government regulatory body, the Lao Casino Management Committee, recently held a ceremony to issue a license to the Lao Offshore Gaming Authority (LOGA), a private company that will act as the general agent for the industry.
Licensees will adopt a business model similar to that of Philippine Offshore Gaming Operators (POGO), which allows services to be provided overseas but not domestically.
Familiar with the project, he stated that the government is currently finalizing the tax structure and work permit details for online operators' employees. The number of licenses will be limited, but the exact figure is not yet clear.
Tao said that this jurisdiction has several advantages over the Philippines, such as lower labor costs and the ability to quickly obtain work permits.
"In short, they will become a low-cost POGO because they are building an entertainment city in the LOGA area," Too said.
The Lao government initially planned to adopt a model similar to Cambodia, where online casino licenses are linked to physical casinos. But now they have decided to adopt a fully online model.
Laos will mainly seek to attract operators focused on the Southeast Asian region and Thailand to avoid upsetting China, which has been using its soft power to force regional governments to crack down on online gambling.
Although not yet finalized, the tax structure is expected to be more favorable than in the Philippines, which has been trying to extract revenue from its POGO, leading to a large exodus of talent.
According to data from the Ministry of Finance, tax revenue from Philippine offshore gaming companies was 2.38 billion pesos in 2018, 6.4 billion pesos in 2019, and 7.18 billion pesos in 2020. However, about half of the companies that closed during the pandemic have not yet reopened.
Last year, the chairman of the Philippine Amusement and Gaming Corporation (PAGCOR), Andrea, stated that offshore gaming companies leaving the country are opening branches in Cambodia, Vietnam, and Laos.
Cambodia announced a ban on all online gambling in August 2019, but Laos has adopted a different strategy to create a structured business environment and rebuild its treasury heavily impacted by the COVID-19 pandemic.
After experiencing strong growth, the Indian economy contracted by 0.5% in 2020 due to the outbreak of the pandemic. According to data from the Asian Development Bank, India's GDP is expected to grow by 3.4% this year and 3.7% next year. However, debt and rising prices are hindering economic recovery, with inflation expected to exceed the GDP growth rate, reaching 5.8%.
As the COVID-19 pandemic began to spread, Malaysia has also been reconsidering its stance on online gambling, but progress has stalled since the end of last year due to the country's unstable political situation.
Last year, the Deputy Minister of Communications and Multimedia of Malaysia, Datuk, stated that the Ministry of Communications and Multimedia has proposed drafting new laws to allow them to tax, regulate, and issue licenses for online gambling. He mentioned that a proposal has been made to the Ministry of Finance to amend the 1953 Common Gaming Houses Act to cover the online industry.
However, the gambling legislation has been put on hold due to political infighting, with the Malaysian Prime Minister Ismail Sabri Yaakob, in office for less than a year, worrying about price increases that could cause them to lose power.
