The Philippines' Department of Finance is brewing stricter regulatory policies for the online gambling industry and plans to significantly increase the current 25% licensing fee to up to 40%. This move aims to increase fiscal revenue while responding to the recent severe warning from the Department of Health that "online gambling" has been classified as a "public health crisis".
Finance Minister Ralph Recto pointed out in the follow-up discussion after the President's SONA on July 29 that the tax system for online gambling is outdated, suggesting an increase to 30%, 35%, or even 40%, but also warned that too high a tax rate might force players to illegal platforms. Currently, only 40% of the industry is licensed and compliant, with 60% operating underground.
The government expects this year's gambling tax revenue to reach 200 billion pesos, with online and offline each accounting for half. However, with the widespread placement of ads on social platforms and e-wallets, the phenomenon of young people addicted to online gambling is becoming more severe, and the Department of Health has issued a health crisis alert. President Marcos also stated that he will "seriously consider" a complete ban on online gambling.
The Department of Finance is evaluating multiple control measures, including: limiting daily recharge times, prohibiting gambling platforms from connecting to wallets like Gcash, and increasing scrutiny of social platform advertising. Recto explicitly opposes gambling but states that regulation is better than allowing illegal activities to proliferate.
Meanwhile, some legal operators and PAGCOR have expressed support for the reforms, fearing that a complete ban might instead foster a larger black market. Under the shadow of policy uncertainty, the Philippine gambling industry is facing the "three mountains" of high taxes, limited rights, and bans, with platforms like PAGO that mainly rely on Chinese customers being particularly at risk. The entire industry is entering the eve of a storm, and the boundary between legal and illegal is set to be reshaped.
