POGOs poised to double revenue despite declining presence — PAGCOR

Philippine offshore gaming operations (POGO) in the country are expected to deliver a strong financial performance this year despite its declining presence, the Philippine Amusement and Gaming Corporation (PAGCOR) said Monday.

In a statement, PAGCOR chairman and CEO Alejandro Tengco said gross gaming revenue generated from POGOs is projected to reach P24 billion by the end of 2023, more than doubling the P11 billion recorded in 2022.

The optimism stemmed from the increase in tax payments from the sector, despite the steady decline in the number of registered POGOs —down to 32 as of July 18 from a pre-pandemic peak of 281 in 2019.

Data from the Department of Finance (DOF) showed tax payments made by POGOs to the Bureau of Internal Revenue (BIR) more than doubled in 2022, skyrocketing by 127% to P8.88 billion from P3.91 billion in 2021.

This consisted of withholding taxes, amounting to P4.35 billion, followed by gaming taxes at P3.65 billion.

POGO companies, likewise, contributed P805.99 million in income taxes, P43.2 million in business tax, P19.42 million in documentary tax stamps, and P9 million in other taxes.

As of July 18, PAGCOR has 32 active offshore gaming licenses and accredited 106 service providers, while it has canceled 46 POGO licenses and 228 service providers, including those in the special class of business process outsourcing.

POGOs have been subject to a series of congressional hearings amid issues of human trafficking surrounding the industry, with Senator Sherwin Gatchalian recommending a total ban on the sector to Malacañang.

The lawmaker said President Ferdinand “Bongbong” Marcos Jr. had asked his personal opinion on POGOs.

“Sinabi ko nga economically, walang mawawala sa atin. Sabi ko ang economic managers lahat sang-ayon na i-ban na ang POGO dahil nga sa tinatawag na reputational risk. Ibig sabihin, nasisira ang pangalan natin at dahil nasisira ang pangalan natin, walang turistang pupunta sa atin,” he said.

(I said economically, we will lose nothing. I said our economic managers all agree that POGOs should be banned due to what is called reputational risk. Meaning our reputation is damaged and because our reputation is damaged, tourists won't come here.)

Eradicating illegal gambling operations

Tengco said PAGCOR’s dedication to eradicating illegal gambling operators, achieved through strong collaboration with law enforcement agencies, will facilitate the accomplishment of the agency’s goals this year.

“We shall undertake this painstaking process to weed out the unscrupulous companies and individuals using the Pagcor license for illegal activities, tainting the name of the whole industry and most especially the Philippines,” he said.

In the first semester of the year, the gross gaming revenues across the industry reached P136.37 billion, up 48.7% from P91.72 billion year-on-year.

For 2023, PAGCOR is targeting P244.84 billion gross gaming revenues for the entire gaming sector.

Tengco expressed confidence that the Philippines will emerge as a more enticing gaming and entertainment hub for investors and guests in the region, thanks to the fine-tuning of regulatory policies. 

Banking on the growth potential of the country’s gaming industry, PAGCOR is planning to launch “casinofilipino.com” —its own online gaming operations— by the first quarter of 2024. 

“It will allow players to interact with the digital counterparts of traditional casino games. It will also transcend physical boundaries and will enable users from around the world to interact and participate in virtual environments. It can reach a global audience and can establish a presence in virtual communities of avid gamers. It will likewise offer an opportunity to tap into new markets and diversify its customer base,” Tengco said last week. — RSJ, GMA Integrated news