Crackdown on illegal Pogos stepped up

The crackdown against illegal online gaming firms is going full swing with authorities conducting raids to shut down unlicensed operators “several times a week” as well as those who dodge taxes, according to the country’s chief gaming regulator.

At the same time, however, the chief of the Philippine Amusement and Gaming Corp. (Pagcor)  noted that firms that fully complied with laws governing Philippine Offshore Gaming Operations (Pogos) would generate  for the country an estimated P56 billion worth of economic windfall.

Speaking to the press during the media launch of an upcoming exhibit of gaming service providers, Pagcor chair and CEO Andrea Domingo said that law enforcement agencies had thus far closed “almost 200” fly-by-night online gaming firms over the last few months.

“The number was around 150 a few months ago, so it must be close to 200 now, because every week they come to us to certify whether some firms are licensed or not,” she said. “When we find that these companies are unlicensed, that’s when they raid those outfits.”

Domingo said many of these illegal online gaming firms were small operators that conducted their activities with a few personnel. Some are said to be former employees of legal gaming companies who left and decided to set up their own operations.

The Pagcor chief said the regulator was now in the process of coming up with a unified system for keeping tabs on the estimated 180,000 foreign nationals—mostly Chinese—who were working in the local online gaming industry. This so-called gaming employment license will serve as an identification document for these foreign workers and help authorities identify which ones are working in the legal and illegal sectors of the industry.

For the legal firms, however, Domingo noted that the Philippine economy was benefiting immensely from their presence in the country, chief of which was the booming real estate sector.

“The biggest beneficiary is the real estate industry which makes P20 billion a year in lease and rental payments,” she said, referring to the large demand for office space for the Pogo industry as well as condominium units to house its thousands of workers.

In addition, the recent agreement between the country’s largest Pogo group and the Department of Finance on the collection of income taxes from foreign workers means the Bureau of Internal Revenue will also have an estimated P24 billion in additional revenue each year, based on the tax bureau’s earlier estimate of P2 billion a month in income taxes from these foreign workers.

Finally, Domingo noted that these Chinese workers spent an estimated P12 billion a year for local goods and services, which also redounded to the local economy. Of this amount, about P1.2 billion will eventually find its way to the state’s coffers in the form of value-added taxes, she explained.