Pagcor revenues surge amid Duterte war on online gaming

The Philippine Amusement and Gaming Corp. (Pagcor) experienced a sharp spike in gaming revenues last year amid a crackdown on online gaming ordered by President Duterte when he assumed office in June.

In an interview with Inquirer, Pagcor Chair Andrea Domingo said the state gaming regulator and operator saw its gross gaming revenues rise to P55 billion at the end of 2016, representing an increase of P8 billion from the previous year.

“Not only were we able to maintain our revenues, but we were actually able to improve it,” she said, explaining that the 17-percent spike in the gaming proceeds from the agency’s casino operations was due to the combined effects of an improving market, as well as newly implemented in-house efficiency measures.

Domingo added Pagcor’s coffers also received a boost after the Supreme Court ruled in favor of the casino industry in its dispute with the Bureau of Internal Revenue late last year. The high court reversed an earlier policy that allowed authorities to collect income taxes from the gaming agency and its licensees.

“Even without these extraordinary income, Pagcor would have still improved revenues  in 2016 by about P4.5 billion,” she said.

Pagcor, which operates its own casinos and regulates the operations of private licensees, also implemented efficiency measures that contributed to the improvement of its finances.

In particular, Domingo said she capped the agency’s operating expenses at 25 percent of its revenues, below the 27 percent allowed by the Governance Commission for GOCCs, while marketing expenses were contained at 5 percent, below the 10 percent allowed.

Going forward, the Pagcor chief said she was “excited” about the prospects of the newly created Philippine Offshore Gaming Operators (Pogo) category, which was launched last year to help bring previously unregulated online gaming operations under the government’s supervision.

Since the Pogo license was created in 2016, Pagcor has received “numerous requests” from gaming operators in the United States and Europe for licenses that would allow them to set up operations in the Philippines to cater to the large demand of gamers wanting to place bets online, Domingo said.

“We have granted 35 licenses to local operators, but we have many expressions of interest from abroad,” Domingo said, explaining the potential of this new gaming category to create additional jobs for Filipinos while simultaneously generating income for the government.

“We want to focus on foreign markets,” she said. “Pagcor gains through the licensing fees, and the Bureau of Internal Revenue also gains by collecting income taxes from these operators. And most importantly, they create value locally because of the local talent that they hire and the lease they have to pay for their operations.”