Online Gambling in the Philippines
The Philippines has become a significant force in the global iGaming industry, solidifying its reputation as a major player in the Asia-Pacific region. Driven by technological advancements, shifts in consumer behavior, and strong government support, the industry has experienced substantial growth.
The iGaming Craze in the Philippines
The iGaming industry has become a significant contributor to the Philippine economy, generating substantial government revenue, creating thousands of jobs, and attracting foreign investment. Taxes and licensing fees collected from the industry support various social and economic programs, highlighting its key role in national development.
The global pandemic has acted as a catalyst for the iGaming industry, accelerating the shift to online platforms. Players are increasingly embracing digital gaming options, leading to a surge in engagement and revenue.
It is worth noting that gambling is deeply ingrained in Filipino culture. For example, betting and playing various money games during wake ceremonies are common. The proceeds from these gambling activities are often provided as financial aid to the deceased's family.
Traditional Casinos vs. Online Gaming
While online gambling thrives, traditional brick-and-mortar casinos face increasing challenges. In the first half of 2024, the gross gaming revenue (GGR) of physical casinos in the Philippines was PHP 99.2 billion (USD 1.7 billion), slightly down from previous years. The gross gaming revenue of casinos operated under the Casino Filipino brand by the Philippine Amusement and Gaming Corporation (PAGCOR) decreased by 11.6%, due to:
Shift to online: Many players now prefer the convenience of online gaming platforms.
Operational restrictions: Health and safety protocols limit the operations of physical casinos.
Intensified competition: The rapid growth of online gaming has intensified competition.
Despite these challenges, physical venues remain significant players, especially in attracting international tourists to high-end integrated resorts.
An online casino named after the Casino Filipino brand is expected to launch soon. Initially planned for the first quarter of 2024, it was postponed to the fourth quarter. However, as of the writing of this article, the project has not yet commenced.
Regulatory Landscape
PAGCOR continues to play a crucial role as both regulator and operator. Recent regulatory changes have reshaped the market:
Lowering fees for electronic gaming operators: Lower costs have attracted newcomers and facilitated expansion.
Streamlined licensing: Simpler processes have fostered competition and innovation.
Responsible gaming measures: Stricter regulations have enhanced the industry's credibility.
POGO ban: The order to cease Philippine Offshore Gaming Operators (POGO) activities by the end of 2024 is a significant development, shifting focus to the domestic market.
The ban on Philippine offshore gaming is significant but also poses challenges, including a potential annual revenue loss of PHP 20 billion (USD 343 million) and up to 30,000 job losses. However, it also alleviates the regulatory burden associated with monitoring the previously involved illegal activities of Philippine offshore gaming companies.
PAGCOR is committed to compensating for the economic losses caused by the POGO ban by enhancing the industry's investment appeal.
Emerging Trends in Online Gaming
Mobile Gaming
The rise of smartphones has transformed the iGaming experience in the Philippines. Operators adopt a mobile-first approach, offering accessible, engaging, and culturally relevant games. Features such as social gaming elements and localized content further enhance player engagement.
Blockchain
Blockchain technology and cryptocurrencies are gradually making their mark in the Philippine online gaming sector. These innovations promise transparency, faster transaction speeds, and enhanced security, although regulatory scrutiny remains stringent to ensure consumer protection.
Social Gaming
Studies show that incorporating social features into games can increase player engagement and retention.
Localization
While English is one of the official languages of the Philippines, not all citizens are proficient in it. According to surveys, 80% of the population can understand written and spoken English. This is a significant number, but for most people, the native language is Filipino. Experts note that games translated into Filipino are becoming increasingly popular.
Investment Opportunities
The Philippine iGaming market offers promising investment channels:
Electronic games and online platforms: The industry's rapid growth provides opportunities for both new and established operators.
Technology infrastructure: Improved connectivity and mobile technology can further support industry expansion.
Integrated resorts: High-end resorts like Entertainment City continue to attract substantial investments.
Skill-based games: Games that blend chance and skill are becoming increasingly popular, offering opportunities for developers.
Starting January 1, 2025, the licensing fee for physical casinos will be reduced from 35% to 30%, and for online resorts to 25%. Additionally, the tax rate on gross gaming revenue will be reduced from 55% to 35%, further enhancing the investment appeal of the Philippine gaming industry.
The Philippine iGaming industry is expected to continue its growth trajectory. According to Statista, online gambling revenue is projected to reach USD 680 million in 2024 and USD 744 million in 2025, reflecting the industry's resilience and adaptability. Successfully navigating regulatory changes, technological advancements, and consumer trends is crucial to maintaining this trajectory.
As the only regulated jurisdiction in Southeast Asia, the Philippines serves as the gateway to the region's online market. The country holds vast untapped potential, poised to attract numerous investors into the online gambling industry.
