Background

The Philippine government once implemented the Philippine Offshore Gaming Operators (POGO) policy, allowing domestically licensed companies to operate online gambling businesses targeting overseas markets (mainly China). This model flourished during Duterte's administration, forming concentrated industrial clusters: hundreds of gambling companies moved into office buildings, employing a large number of foreign workers (mainly Chinese), and enjoyed a relatively relaxed environment for telecommunications and capital flow in the Philippines. However, as the POGO industry became intertwined with telecommunications fraud, money laundering, and other crimes, and faced strong diplomatic pressure from countries including China, the Philippines has significantly tightened its policies in recent years, announcing a complete ban on POGO by the end of 2023. The withdrawal of the Philippines has made it inevitable for this massive industry chain to find new footholds globally. This article will comprehensively consider the legal policies, investment trends, and diplomatic pressures of various countries, prospectively mapping out a global landscape for offshore gambling business reception, and analyze the potential successor countries.

Necessary Conditions for Offshore Gambling Clusters

Before analyzing specific countries, it is necessary to clarify the conditions required for "POGO model" industry clusters:

Legal/Grey Haven: Local laws must allow or tacitly permit online gambling operations (at least for foreign players), or there must be regulatory grey areas. The government can issue licenses to legalize operations, or although not explicitly legal, lax enforcement, corruption, and tolerance allow gambling companies to actually be sheltered.

Economic Incentives: The local area hopes to introduce the gambling industry to gain taxes, investment, and employment. Usually, economically underdeveloped countries are more motivated to attract such high-profit industries. Some countries view online gambling as part of developing the outsourcing/BPO industry, driving infrastructure and services.

Infrastructure Freedom: Good communication networks and international internet access, lax control over cross-border capital flows, facilitating the operation of gambling platforms and transnational capital settlement. Some countries even provide special parks and free trade zones to reduce regulatory barriers.

Security Control and "Pressure Resistance" Ability: The local government can resist pressure from countries like China to some extent, not easily banning these offshore gambling businesses. In other words, either the country has diplomatic autonomy and dares to refuse China's demands (like the Philippines during Duterte's era openly refused to ban POGO), or the official tacitly allows private grey operations, superficially dealing with it. High-level corruption or protection by power groups also enhances the industry's survival probability.

Below, we will evaluate potential countries by region and analyze their policy trends and diplomatic attitudes.

Southeast Asia: Traditional Gambling Outsourcing Hinterland

Southeast Asia has always been a hotspot for offshore gambling and internet fraud, with countries like Cambodia, Laos, and Myanmar becoming havens for Chinese criminal groups due to weak governance and rampant corruption. The rise and fall of the Philippines' POGO have made neighboring countries the preferred reception sites:

Cambodia: "Ban" Under the Grey Heaven

Legal and Policy: Cambodia was once a gathering place for Chinese online gambling companies, especially in Sihanoukville, where hundreds of online casinos and scam parks flooded in between 2016 and 2019. At the end of 2019, Prime Minister Hun Sen, under pressure from China, announced a comprehensive ban on online gambling and stopped issuing/renewing related licenses. After the ban took effect, a large number of Chinese practitioners left the country, and the industry seemingly disappeared. However, recent evidence suggests that Cambodia is still a haven for regional scam gambling groups. In 2022, Cambodia and China established a law enforcement cooperation office, symbolically combating transnational scams together; however, according to estimates by American aid agencies and think tanks, there are still over 150,000 people trapped in scam parks in Cambodia, engaged in online gambling and scams, with an annual output value of up to 12.5 billion US dollars. This figure has surpassed Cambodia's largest traditional export industry (garment industry) and is almost four times the tourism industry. Criminal gangs not only made a comeback but became even more rampant—investigators claim that Cambodia is the only country where scam parks can operate openly in the capital Phnom Penh without fear of being banned.

Investment Trends: Cambodian officials still publicly promote combating human trafficking and illegal gambling. At the end of 2023, Cambodian authorities announced a law revision to tighten casino industry regulations and cooperated with Thai police to raid a scam park at the border. However, the actual effect is limited, and many parks have moved underground or to more hidden areas. It is worth noting that after Hun Sen's son, Hun Manet, took over as prime minister, the relationship with China remains close, and the possibility of lifting the ban on online gambling in the short term is not high, and the government will not openly attract Chinese-funded online gambling enterprises. On the other hand, grassroots law enforcement corruption and local power protection still secretly accommodate gambling scam gangs in places like Sihanoukville and Phnom Penh. Analysts say the influence of criminals in Cambodia has made it "difficult to shake." Recently, some large gangs have moved their operations back to Cambodia from turbulent areas in Myanmar to avoid attention. Therefore, Cambodia currently presents a grey state of "legally prohibited, actually tolerated."

Diplomacy and Pressure Resistance: Cambodia is highly sensitive to China's policy intentions, and the rapid response to Chinese demands in 2019 is clear evidence. However, in combating scams, the Cambodian government has shown duplicity: superficial cooperation, private procrastination. Although there is a law enforcement liaison office in Phnom Penh, senior Cambodian police officials have repeatedly downplayed the park issue, claiming that most reports are "untrue." This indicates that the Cambodian government does not truly cooperate with the comprehensive eradication, preferring to superficially deal with Chinese diplomatic pressure while protecting its own vested interests. As long as these parks do not provoke major domestic security incidents, the Cambodian government seems willing to continue tacit approval. Overall, Cambodia is already one of the centers of the underground gambling scam empire, but due to the official ban, it cannot openly form a "legalized" POGO-style cluster, and the industry exists in a black-grey form.

Laos: Lawless Land in Special Economic Zones

Legal and Policy: Laos nominally has no open policy for online gambling, but "special zones" designated in remote areas have become lawless enclaves. A famous case is the "Golden Triangle Special Economic Zone" (GTSEZ) in northwestern Bokeo Province, leased and operated by Chinese businessman Zhao Wei. This zone has established a series of gambling businesses such as the Kings Romans Casino, forming a system that has long been accused of involvement in drug trafficking, wildlife smuggling, human trafficking, and internet scams. The US Treasury Department has sanctioned Zhao Wei and his company as a transnational criminal organization. However, the Lao authorities not only did not crack down but also awarded Zhao Wei the "National Development Medal" at the end of 2024, with the provincial governor personally going to the special zone to present the award, recognizing his donations to local public security. This move has been interpreted by international public opinion as Laos defaulting or even encouraging GTSEZ to continue operations. It is explicitly pointed out that GTSEZ has become a notorious hotbed of internet scam activities.

Streets in the Golden Triangle Special Economic Zone in Laos: lined with Chinese signs and gambling entertainment venues, it is a "grey zone" controlled by Chinese capital within the country.

Industry Status: In GTSEZ and other northern border gambling zones in Laos, Chinese criminal groups have deeply cultivated operations. These parks employ a large number of Chinese nationals year-round, conducting online gambling, scams, and other businesses, and building apartments and hotels to form several Chinese towns. Due to the limited control ability of the Lao government and a relatively high level of tacit understanding with China, Chinese law enforcement has also conducted activities on the northern border of Laos, trying to curb cross-border crime. However, as of now, Laos has not substantively restricted the gambling network business in the special zones, instead turning a blind eye to investors like Zhao Wei. From an investment perspective, the Lao government has not publicly solicited new online gambling enterprises, but the existing special zone model may attract original POGO companies to secretly settle in. For example, when China cracked down on underground football gambling in 2016, many gangs moved their bases to Laos, Cambodia, and Myanmar. The existence of places like GTSEZ provides these gangs with natural shelters.

Diplomacy and Pressure Resistance: Laos is highly dependent on China, but it chooses to use special zones as a buffer to achieve "pleasing both sides"—the central government promises China to combat crime, but actually allows the existence of these "sovereign lease lands," thus retaining grey industry interests under the guise of cooperation. China has also stationed security forces in the Golden Triangle area to monitor the situation, but it seems not to have forced Laos to close the special zones, instead accepting a limited default. Therefore, Laos adopts a "safe harbor" strategy in resisting pressure: confining sensitive industries to special zones, keeping the central government at a distance, showing an attitude to China, and providing a haven for criminal groups. In the next 1-2 years, unless international pressure increases significantly or the Zhao Wei group collapses, the Lao Golden Triangle special zone will continue to be a "semi-legal" gambling scam cluster, continuing to host grey businesses from China.

Myanmar: Sanctuary in Chaotic Borders

Legal and Policy: Myanmar's federal law explicitly prohibits most forms of gambling, but due to long-term civil wars and local fragmentation, many border areas are actually not controlled by the central government, becoming hotbeds for transnational crime. Especially after the 2021 coup, the domestic situation became disordered, and various forces tacitly or even participated in illegal gambling scams to raise funds. For example, Wa State in eastern Shan State, Mong La, and the Kachin and Karen border areas controlled by ethnic armed groups have all established casino cities. The most famous is "Yatai City" near Myawaddy in Karen State, jointly built by Chinese businessman She Zhijiang and local armed forces, claiming to invest 15 billion US dollars to create a comprehensive complex integrating casinos, entertainment, and tourism. In fact, since its establishment in 2017, the city has quickly become a hub for online gambling and scams. Additionally, Wa State's capital Pangkham (the small gambling city "New Macau") and Mong La's "Special Zone No. 4" in eastern Shan State also have Chinese-funded online casinos and scam industries.

Industry Status: In these "lawless" areas of Myanmar, thousands of Chinese and even Southeast Asian employees are attracted or lured to operate global scam and gambling websites. Due to the large number of illegal businesses moving from the Philippines and Cambodia to Myanmar since 2021, the northern Myanmar and Myanmar-Thailand borders have temporarily become the global scam centers. However, from 2023 to 2024, China began to pressure scam gangs in Myanmar, adopting joint law enforcement and border blockade measures. The Myanmar military government also symbolically raided a park in the Taigong area in 2023, arresting hundreds of suspects under Chinese supervision. But overall, due to the lack of legitimacy of the Myanmar regime, its high dependence on China, and its deep involvement, there is a lack of mutual trust between China and Myanmar on this issue: intelligence indicates that some military forces themselves support scam parks for profit, leading to distrust between China and Myanmar on this issue.

Diplomacy and Pressure Resistance: The Myanmar military government superficially complies with China's demands to "eradicate internet scams," but is actually reluctant. On one hand, they need China's political and economic assistance and are unwilling to openly refuse cooperation; on the other hand, the military government has limited control over border armed forces and is suspected of colluding with some gangs. Therefore, its "pressure resistance" performance is high-level verbal cooperation, low-level perfunctory. Many criminal groups have noticed the tightening situation in northern Myanmar and have begun to move to places like Cambodia with more lax regulation. In the short term, Myanmar's chaos inevitably makes it a criminal haven, but due to the lack of a stable legal protection environment, it is not easy to form a concentrated and public industrial cluster like the Philippines, but more like a guerrilla base: parks are scattered and hidden, and may move at any time due to war or political deals.

After 2025, under the pressure from China and Thailand's operations, the Myanmar government has clearly surrendered, and it is currently on the brink of collapse, no longer suitable.

Vietnam, Thailand, Malaysia: Scattered Infiltration and Covert Operations

Vietnam: The Vietnamese government strictly regulates gambling, only allowing foreigners to gamble in specific tourist casinos, and online gambling is basically illegal. However, there are signs that some original POGO operators have transferred their technology or customer service departments to Vietnam to operate covertly. For example, Vietnam once uncovered a Chinese-run underground casino in Lao Cai Province, arresting nearly a hundred people. There are also reports of counterfeit BPO companies appearing in southern Vietnam, actually being Chinese-funded gambling scam dens. Overall, Vietnam has no public trend of attracting such industries, and public security organs often adopt high-pressure tactics such as sudden arrests and immediate deportation for illegal operations within the country. Given the complex relationship between China and Vietnam, Vietnam will neither openly offend China nor rule out tacitly allowing small-scale pilot projects to explore profits (such as secretly allowing some online gambling operations to hide in industrial zones). But in the foreseeable 1-2 years, Vietnam is unlikely to become the next POGO cluster host.

Thailand: Gambling is mostly illegal in Thailand, but the current government is considering opening physical casinos to boost the economy (such as the Bangkok Entertainment Complex plan). Regarding online scams, Thailand has recently joined hands with China and Cambodia to combat cross-border parks. However, Thailand itself also has activities of Chinese-funded scam gangs, such as the 2022 case involving a Thai general colluding with a scam gang, causing a sensation. Some Thai free trade zones or border towns may secretly harbor Chinese casino networks, but they are not yet significant. Additionally, Thailand is sensitive to large-scale illegal employment of foreigners. Without policy relaxation, Thailand is unlikely to see large-scale POGO-style clusters, at most a few companies operating under cover. Facing Chinese pressure, Thailand's stance is more cooperative, lacking the tradition of sheltering industries "against the wind."

Malaysia: Malaysian law prohibits unlicensed gambling, and corporate law and network regulation are relatively sound. Although there are legal casinos like Genting in the country, gambling is strictly restricted for local and Muslim residents. In recent years, there have been reports of some Chinese-funded scam gangs infiltrating Malaysia (including East Malaysia's Sabah state and peninsula cities), but Malaysia has close law enforcement cooperation with China, frequently deporting Chinese suspects, and will not tolerate open gambling businesses. Due to religious and diplomatic factors, Malaysia is basically ruled out.

Summary

Among Southeast Asian countries, Cambodia, Laos, and Myanmar remain the most active regions for offshore gambling scam networks, with the embryonic form of "grey clusters," but there is still a gap from open legalization. Vietnam, Thailand, and Malaysia, although with scattered infiltration, do not have policy environments and diplomatic attitudes that support forming large-scale clusters. A Southeast Asian fringe country's sudden rise is particularly noteworthy: East Timor.

East Timor: A Rising Star's Legalization Attempt

Policy Breakthrough: East Timor (Timor-Leste), as one of the youngest and most economically backward countries in Asia, is considering opening up the online gambling industry to seek economic breakthroughs. In 2023, the country established the "East Timor Virtual Gambling Association" (VGA-TL), starting to draft an online gambling regulatory framework, drawing on the models of offshore gambling centers like Malta and the Isle of Man. This means that East Timor intends to issue online gambling licenses, allowing foreign operators to set up servers and businesses within its territory. In September 2024, East Timor's Oecusse Autonomous Region announced a 550 million US dollar "Digital Center" project, claiming to build the country's first online gambling management and call center, providing telecommunications and service upgrades. Initially, President José Ramos-Horta was reserved about opening casinos, but driven by economic reality, local governments have begun to act.