As the final deadline of December 31, 2024, for the POGO ban approaches, speculation is rife both inside and outside the industry about whether the Philippine gaming industry will face a new turning point in the future.
According to the Philippine Amusement and Gaming Corporation (PAGCOR), since President Marcos Jr. announced a comprehensive ban on POGO, a large number of licensed POGOs have been shut down, while the remaining illegal POGOs are trying to evade crackdowns by downsizing and going undercover.
According to the Bureau of Immigration, there are still over 20,000 foreign employees associated with offshore gaming operators (POGO) stranded within the country. With the implementation of the ban, these illegal operators are forced to scale down and start operating discreetly in residential areas, resorts, and hotels, trying to survive under the government's radar.
A significant portion of these groups disguise themselves as legitimate businesses, such as Business Process Outsourcing (BPO), secretly engaging in transnational fraud activities, some even involving human trafficking and money laundering.
Nicolas Zheng, Deputy Minister of Justice of the Philippines, admits that despite the government's continuous efforts with limited resources, completely eradicating these criminal activities still poses a huge challenge.
Southeast Asia and the Global Crackdown on Gambling and Fraud Intensifies
The Philippines is not the only country pressuring illegal gambling activities. With the global economic downturn, other Southeast Asian countries are also taking action:
Thailand: The government has been actively cracking down on illegal gambling networks, recently raiding the "Macau 888" illegal outlet in Thailand, demonstrating its "zero tolerance" attitude towards illegal activities.
International Cooperation: The International Criminal Police Organization, in collaboration with law enforcement agencies from 40 countries and regions, launched the "Haechi-V" operation, arresting over 5,500 suspects and seizing $400 million in illegal proceeds from July to November. China, the Philippines, Cambodia, and Vietnam also participated in the operation.
Cambodia: Explicitly prohibits any form of gambling content promotion and rectifies gambling-related advertisements and public promotions. Recently, several influencers, platforms, physical businesses, and even tuk-tuk drivers involved in promotions have been regulated.
The Russian Federal Security Service also raided a call center, cracking down on a fraud network involving 50 countries, illegally profiting $1 million daily. Reportedly, this center also issued false terror threats to several Russian cities under the direction of the Ukrainian Security Service in 2022.
Even Myanmar, which is constantly plagued by internal conflicts, has news that leaders from Shan State have gone to the mainland for negotiations. It is unclear whether they are seeking help or discussing terms. The Chinese Ministry of Foreign Affairs responded that China is highly concerned about the situation in northern Myanmar and has been promoting Myanmar to cease fire and stop the war as soon as possible.
We might speculate that Shan State, with many cyber fraud parks, might be negotiating with the mainland about arresting and extraditing people!
This shows that even amidst ongoing geopolitical conflicts, countries are highly unified and urgent in their stance against telecommunications fraud, as it has spread too rapidly.
Rumors say that Thailand stormed in with 100,000 dogs. Moreover, Thailand has always been tough on Chinese people, cracking down on gambling, cyber fraud, and particularly scrutinizing Chinese goods, supermarkets, and businesses, fearing they might not catch any minor issues.
After the POGO Ban: New Opportunities or Complete Prohibition?
The final deadline for the POGO ban is December 31, 2024. Will the Philippine gaming industry have a future after this? Two possibilities have sparked widespread discussion within and outside the industry:
1. Reissuing Licenses
Some industry veterans believe that the Philippines might reopen legal licenses with a stricter regulatory framework after a comprehensive overhaul, creating a safer and more compliant operating environment for the gaming industry. This could not only prevent massive tax revenue losses but also inject vitality into the local economy.
2. Intensifying Crackdowns
If President Marcos is determined to completely eradicate POGO, then after 2025, the Philippines will continue to take even stricter law enforcement measures against covert illegal gambling activities. For example, as mentioned earlier in the land law, the government can directly confiscate properties and assets acquired illegally by foreign nationals involved in illegal activities, and the punishment for those involved is even more severe.
Moreover, the "2024 Gaming Act" has entered the Senate review stage in the Philippines. Once the House of Representatives also approves it, and the President signs it into law, it will be a matter of time. This act will further consolidate the ban.
Indeed, the implementation of the ban has already put tremendous pressure on practitioners. Some gaming company executives, even after paying huge "protection fees," could not avoid deportation or criminal penalties.
On December 5, there was an incident where a person being deported caused a disturbance at the airport, trying to shred the deportation documents, and fought against seven others. Do you remember the "big brother" incident? This person was a manager at Sunshine, named "Qiushui," who was arrested once in July and was released on the spot after paying money.
It was revealed that he had spent over 20 million locally, hoping to use connections to stay in the Philippines, but he was still deported! It was truly unexpected! Given his "credentials," returning would definitely mean receiving silver bracelets, at least ten years to start.
Furthermore, the Ministry of the Interior stated that although the closure of POGO businesses will lead to an estimated revenue loss of 20 to 25 billion pesos, this only accounts for 0.25% of the GDP. Therefore, the government prefers to safeguard the long-term interests of the nation. The Ministry of the Interior also requires local administrative chiefs to submit reports on suspicious activities within their jurisdictions and possible POGO institutions.
Even if the job fairs prepared for unemployed POGO personnel are not very effective, the Minister of Labor personally stated that there are no plans to extend the final deadline of December 31 for stopping POGO activities. What was promised by the end of the year is final, with no room for buffering.
This shows a firm resolve!
Even more explosive is today's announcement by PAGCOR that by December 15 (Sunday), all licenses related to the Philippine offshore gaming industry (POGO) will be revoked.
PAGCOR Chairman Tengko assures that by January 1, 2025, there will be no more POGO in the Philippines, including operators holding internet gaming licenses (IGL).
Meanwhile, multiple departments will continue to crack down on illegal POGO operations conducted in hotel rooms, apartments, and small residential areas, continuing arrests!
So, like the Sunshine manager, even spending over 20 million cannot guarantee safety. The so-called "turning point" probably has only two paths: pay even more protection fees, or just honestly go to prison.
The first option is almost the same as being raided. The second option is even worse than the first.
As for the next few years, can the gaming industry be revitalized?
It is certain that the Philippine gaming industry will undergo a difficult transition period. Its future direction will still depend on the following aspects:
Policy Direction: If the Philippine government adopts stricter legal and regulatory frameworks, legal gaming might make a comeback in the coming years.
International Cooperation: The Philippines needs to cooperate with the international community to strengthen the joint crackdown on cross-border gaming and fraud, creating a favorable international environment for legalization.
Economic Needs: If the comprehensive ban has a greater impact on the Philippine economy than expected, the government might have to reopen legal gaming operations to fill the fiscal gap.
No matter what the future holds, this year will be a turning point in the history of the Philippine gaming industry, and even the nation's history. Whether it will be legalization or complete prohibition will determine the survival of this industry.
For investors and practitioners, "surviving this year" might indeed be a short-term solution, but the long-term prospects of the industry are still unclear.
