According to data from investment bank Morgan Stanley, the Philippines' growing domestic online gambling industry has become the country's largest contributor to gambling tax revenue, with the regulatory body PAGCOR collecting 28 billion Philippine pesos (approximately $490 million) in taxes from the online sector alone in the third quarter of 2024.
Morgan Stanley analysts noted in a report that, based on PAGCOR's data, the annualized gambling revenue from online gambling in the Philippines reached $2.4 billion in the third quarter, accounting for 70% of the total revenue from physical gambling.
However, the tax rate for online gambling is as high as 35%, higher than that for physical gambling, even though this rate has been gradually reduced from 50% two years ago.
The analysts pointed out that given PAGCOR's plans to further reduce the tax rate on total revenue from domestic online gambling, competition will become more intense in the future. Earlier reports by this publication indicated that from January 1, 2025, the license fees for online gambling operations at integrated resorts will be reduced to 25%, and other physical operators will be reduced to 30%, making it closer to the tax rates for physical gambling.
The tax rate for mass gambling in physical casinos is 25%, and for VIP gambling, it is 15%.
Morgan Stanley noted that the leading B2C online gambling operator DigiPlus currently holds a 50% market share in the domestic market and has about 30 million registered users, with its total revenue and EBITDA surpassing those of Bloomberry Resorts Corp. However, Bloomberry will launch its own online gambling application in the third quarter of 2025, and Morgan Stanley stated that the application is "likely" to use a different brand from its existing Bloomberry APP to attract a different customer base.
This year, PAGCOR has been actively promoting the growth of domestic online gambling (also known as e-Games), including eCasino, eBingo, sports betting, and specialty games.
This contrasts sharply with the situation of offshore gambling operators (POGO) in the Philippines, as the government has been actively shutting down this industry in recent months and plans to completely ban it from January 1, 2025.
